FILE PHOTO: A crane towers over the Sydney House construction site, where a redevelopment is underway, in Sydney, Australia, August 19, 2025. REUTERS/Hollie Adams/File Photo

SYDNEY (Reuters) -Australia's international trade added only slightly to economic growth in the second quarter and government spending made no contribution at all, leading some analysts to lower their growth forecasts.

Data from the Australian Bureau of Statistics on Tuesday showed the current account ran a deficit of A$13.7 billion ($8.90 billion) in the June quarter, from a revised A$14.1 billion the previous quarter. That compared with forecasts for a A$16.08 billion deficit.

That was due to domestic investors earning more from their overseas equities, while strong imports of non-monetary gold and travel services led to a fall in the goods and services surplus.

The ABS said net exports would add 0.1 percentage points to gross domestic product in the second quarter, when analysts had expected a flat contribution.

Government spending, which was the engine of activity last year, continued to underwhelm, with the bureau estimating it made no contribution to growth in the second quarter. Economists had expected a rebound from the first quarter.

The soft partial data led analysts at RBC Capital Markets and Citi to lower their forecasts for second-quarter GDP to 0.5% quarter-on-quarter from 0.6% previously. The GDP data is due on Wednesday.

A Reuters poll of 22 analysts forecast the economy would grow by a moderate 0.5% in the second quarter, up from 0.2% the previous quarter, as household spending began to pick up after a long fallow period, lifting the annual growth rate to 1.6%.

"We expect private household consumption to have underpinned activity in the quarter with a marginal contribution from business and dwelling investment," said Robert Thompson, a macro rates strategist at RBC Capital Markets.

"Government demand looks to have been flat to down slightly in H1-25. This skew toward private sector activity is encouraging."

The Reserve Bank of Australia has cut interest rates three times this year to 3.6% as inflation has cooled, but the recovery in the economy has been tepid so far, adding to the case for more policy easing in coming months.

The RBA expected the economy to grow just 1.7% by the year end.

Swaps imply a less than 20% chance the RBA will follow up with another cut this month as a monthly reading on inflation came in on the high side and the labour market remained resilient, but a move in November has been fully priced in.

Rates are seen settling around 3.10%.

($1 = 1.5389 Australian dollars)

(Reporting by Stella Qiu and Wayne Cole; Editing by Sonali Paul and Jamie Freed)