The Australian economy is on track for another feeble quarter of growth propped up by firmer government spending.
June quarter national accounts due on Wednesday are expected to show an economy growing but only just, prompting the federal treasurer to manage expectations and fend off accusations of blame-shifting.
Analysts received the final pieces of the economic growth puzzle on Tuesday, which showed stronger-than-expected spending on public infrastructure and services.
The National Australia Bank bumped up its growth forecasts to 0.3 per cent for the three months to June, still weak, but an improvement on its previous estimate of 0.1 per cent.
Public demand will add 0.4 percentage points to growth in the June quarter, Tuesday's Australian Bureau of Statistics data showed, which was stronger than NAB had thought.
Net exports, the difference between exports and imports, will contribute 0.2 percentage points to the final count.
Global economic uncertainty, persistent price pressures and higher interest rates had been slowing the economy, Treasurer Jim Chalmers said on Tuesday.
Australia has been posting persistently below-trend growth, with the economy expanding a modest 0.1 per cent in the three months to March and 0.3 per cent in the December 2023 quarter.
Dr Chalmers hit back at suggestions he was trying to re-direct responsibility towards the Reserve Bank, saying it was a fact higher interest rates were slowing the economy and it was not unusual to point that out.
"We've got different responsibilities, the governor and I," he told ABC news on Tuesday.
"But we've got the same objective and our objective is to get on top of this inflation challenge in our economy without making life harder for people or smashing an economy which is already weak enough."
Dr Chalmers' criticism began in pre-emptive remarks before Wednesday's national accounts print, indicating higher interest rates were "smashing the economy".
Shadow Treasurer Angus Taylor said the government had contributed to inflation by spending too much and was trying to deflect blame.
"The problem with this treasurer is he is fighting everybody and everything except his own homegrown inflation," he told Sky News on Tuesday.
Despite the sluggish economy, consumers are feeling more optimistic.
Household confidence in future finances jumped to a five-month high last week, according to weekly surveys done by ANZ and Roy Morgan.
Inflation expectations also fell to 4.6 per cent, its lowest reading since 2021.
The fall follows a softening in the consumer price index last week, and bodes well for a central bank vying to keep inflation expectations anchored.
