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In wake of interest rate hike, Australia optimistic

The Australian economy surged in the three months through September, according to official data released yesterday just two hours after the central bank raised it benchmark interest rate for the second time in as many months.

The economy grew 1.2 percent in the quarter from the previous three months of April through June, the Australian Bureau of Statistics said. That compared with growth of just 0.3 percent in the April to June quarter.

Compared with the previous corresponding quarter to the end of September last year, economic growth was 2.6 percent, the bureau said in its quarterly report on the economy.

Growth in the farm sector surged 15.8 percent in the quarter, followed by transport industry growth of 3.4 percent and 2.8 percent for retail trade, the bureau said.

Earlier, the Reserve Bank of Australia raised its benchmark interest rate a quarter of a percentage point to 5.25 percent, citing an improving local and world economy and a continuing rapid increase in household debt.

The bank said consumer spending has "accelerated sharply," business confidence is high, the labor market is strong, and prospects for the farming sector are improving after the breaking of a drought.

The rate increase came after the central bank raised the benchmark rate a quarter of a percentage point last month, which was the first increase in 17 months.
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