The Reserve Bank of Australia could be forced to cut interest rates for the third time this year after the economy barely grew last quarter, as flatlining productivity and tepid business investment undermined Treasurer Jim Chalmers’ call for a private sector-led recovery.

The Australian economy expanded just 0.2 per cent in the three months to March as businesses cut back spending on equipment, consumers remained cautious and Labor’s crackdown on foreign students hit export earnings.