Australia’s economy grew 0.4% in the second quarter and 2.1% from a year earlier, beating market expectations for annual growth of around 1.8%, the Australian Bureau of Statistics said. The firmer-than-expected expansion is stoking the case for the Reserve Bank of Australia to raise interest rates further amid sticky inflation. Quarterly growth was supported in earlier detail by a 1.5% rise in government consumption and a 0.7% contribution from net exports as imports fell more sharply than exports, while private investment declined 0.4% and household spending rose just 0.1% under elevated living costs. The RBA has held the cash rate at 4.35% since November 2023 after 13 increases since May 2022, and markets had previously leaned toward cuts as early as November 2024 if inflation moderated. The stronger GDP reading shifts attention back to upside risks for policy even as soft household demand and weak private investment leave the expansion fragile and barely growing on a per capita basis. Officials and investors will weigh upcoming inflation and employment data in judging whether rates need to move higher or can eventually ease.