Australia may be the miracle economy this year, with a housing boom and low interest rates fueling growth of 3.7 percent, forecaster Access Economics said.
Australian growth will "easily outpace" most of the world this year, Access said in its fourth-quarter outlook.
Home loan interest rates at the lowest in three decades are fueling a housing boom and consumer spending. That's ensuring Australia skirts a global slump that has sent its two biggest trading partners, Japan and the US, into recession.
"Australia may yet resurrect the title of miracle economy," Access said. "It will easily outpace the world, riding a housing rocket, record low interest rates and government spending largesse."
Last year, the Reserve Bank of Australia cut its official interest rate 2 percentage points to a 28-year-low 4.25 percent.
Still, Australia's growth prospects mean "the central bank is at or near the bottom for rates," Access said.
Low rates, and a A$14,000 (US$7,202) government grant for first home builders have spurred a housing boom. Building approvals in November were 40.2 percent higher than a year earlier.
A government report today showed the number of home loans fell 0.3 percent in November from the previous month, although they were still 17 percent higher than a year earlier.
The economy grew 1.1 percent in the third quarter from the previous three months, with more than half the rise coming from the building surge.
Woolworths Sales Rise Retail spending rose for the sixth straight month in November, boosting sales for companies such as Woolworths Ltd., Australia's largest grocery retailer. Woolworths said sales for the 14 weeks to Jan. 6 rose 16 percent to A$6.9 billion.
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