Commonwealth Bank economists share the consensus estimates, saying “growth will be driven by a solid 2 per cent lift in household consumption”, while “public spending and inventories will also support growth”.

National Australia Bank, meanwhile, anticipates March quarter growth to fall short of forecasts, with its economists priming for a reading of just 0.1 per cent for the quarter, as a pick-up in imports weighs on growth.

“Regardless of a softish quarterly result, the near-term outlook for Australian activity remains strong,” NAB said. “Consumption should lift further in the coming quarter as omicron and flood disruptions pass, before beginning to normalise later in the year.”

Wages focus

Investors will zero-in on the wages component of the data given its role in driving Reserve Bank policy decisions.

Wages are among the stickiest costs facing businesses and when they rise consistently it can transform higher inflation from a temporary burst to a prolonged issue facing the economy.

Weaker wages growth will lessen the likelihood of more aggressive central bank monetary tightening, while a more strident reading will pressure the RBA to tighten.

“Labour costs will be of relevance due to the current inflationary context and implications for monetary policy,” said CBA economists.

“We expect labour costs to show wage pressure forming but to confirm that Australia is not facing the wage-price spiral seen abroad.”

CBA anticipates the data will “not alter the path of monetary policy”, and that the RBA will raise the cash rate by 25 basis points at its June meeting, following an increase by the same margin in May.

A soft reading on wages data would support the most recent wage price index, which showed wages grew by 0.7 per cent in the March quarter, shy of forecasts.

New jobs added in April also fell well short of estimates, but helped to maintain the jobless rate at 3.9 per cent after the measure was revised down for the March quarter to the lowest level in 48 years.

The March quarter GDP data will also provide clarity on the challenges facing the new Labor government, after its election victory in a campaign that focused on economic issues, including cost-of-living pressures.

Last week, Treasurer Jim Chalmers said Australia’s “dire” budget position and “skyrocketing” inflation would dampen some of its spending commitments.

The comments provide some confidence that the government “will manage the budget responsibly,” said Shane Oliver, chief economist for AMP Capital.

“High inflation argues for smaller deficits to take pressure off interest rates.

“Higher commodity prices and lower unemployment still point to better budget numbers … but the deficit and debt projections are still too high and rely over the medium term on optimistic productivity growth assumptions.”

Commodities prop up ASX 200

The S&P/ASX 200 has fallen 3.5 per cent this year, dragging the blue chip index down 5.8 per cent from its peak in August last year. The local sharemarket has, however, outperformed global shares, in part because of the buoyancy of commodity prices.

Mining companies, which make up roughly a fifth of the blue chip index, and the squeeze higher in the price of energy commodities – iron ore and even agricultural commodities such as wheat – have helped the sector avoid some of the pain facing other corners of the sharemarket.

Commodities have rallied this year, in part because they are a popular inflation hedge, providing investors with exposure to the raw materials that power economies, and also because of the war in Ukraine.

Ukraine is a major agricultural exporter, while sanctions placed on Russia, a major producer of oil, gas and iron ore, have squeezed those commodities higher.

“Shares are likely to see continued short-term volatility as central banks continue to tighten to combat high inflation, the war in Ukraine continues, and Chinese COVID-19 lockdowns [drive] fears of recession,” said Dr Oliver.

“However, we see shares providing reasonable returns on a 12-month horizon as the global recovery ultimately continues, profit growth slows but remains solid, and interest rates rise but not to onerous levels.”