Australia’s economy grew 0.6 percent in the three months to December last year thanks to an increase in exports, but analysts warned the country’s mining boom covered up weakness in other sectors.
The Australian Bureau of Statistics said the quarter-on-quarter expansion followed a 0.7 percent gain in the September quarter and resulted in a 3.1 percent annual growth rate last year, compared to 2.3 percent in 2011.
Australian Treasurer Wayne Swan said the numbers represent “21 continuous calendar years of growth for Australia, which is a record unmatched by any other advanced economy over this period.”
He also hailed a 3.3 percent rise in exports in the three months to December as “the second-fastest quarterly increase in almost a decade” as coal and iron ore shipments rebounded, making them the largest contributor to growth.
The mining, manufacturing, health and finance sectors were the main drivers of growth in the quarter, each contributing 0.1 percentage points to the increase in GDP, the bureau said.
The plunge in Australia’s terms of trade — the value of its exports against its imports — slowed to 2.7 percent from 5.3 percent in the previous quarter, suggesting conditions were improving in the key mining sector.
However, tepid consumer spending growth of 0.3 percent and a clear divide between mining and non-mining states indicate there are still imbalances in the economy, with southern provinces technically in recession as the north booms.
“Australian GDP growth clearly slowed through the course of last year,” AMP Capital Investors economist Shane Oliver said, estimating that underlying growth had stagnated and would likely remain under pressure another six months.
“The response to interest rate cuts has been sub-par, with most economic indicators taking longer to pick up than has been the case through past easing cycles,” he added.
“This reflects a combination of factors including post-GFC [global financial crisis] caution [and] the failure of the Australian dollar to fall,” Oliver said.
Swan conceded that the “transition from mining to non-mining drivers of growth may not be seamless” but said Australia’s economy continued to outstrip “every major advanced economy and the vast bulk of the developed world.”
“Australia’s around-trend growth rate over the year is more than four times the OECD [Organisation for Economic Co-operation and Development] average,” he said.
Canberra has flagged growth of 3 percent for the fiscal year ending June 30, although the Reserve Bank of Australia puts it at a more moderate 2.5 percent for the same period.
Central bank Governor Glenn Stevens said on Tuesday that investment outside the mining sector remained “relatively subdued” and the exchange rate was inflated, suppressing local industries like tourism, manufacturing and education.