Australia’s buoyant economy posted strong growth in the second quarter of the year on the back of increasing exports, consumer and government spending, official data showed yesterday.
The economy expanded by 0.9 percent in the March-June quarter, following 0.7 percent growth in the first three months of the year, to take the annual rate of growth to 3.4 percent — the fastest pace since September 2012.
The quarterly reading was far above market expectations of 2.8 percent, and comes after the previous quarter’s year-on-year reading of 3.1 percent.
“The national accounts for the June quarter highlight the strength and the resilience of the Australian economy, which is in its 27th year of consecutive economic growth,” Australian Treasurer Josh Frydenberg told reporters.
“The economy is strong, the fundamentals are good and momentum has continued, and these are an encouraging set of numbers,” he said.
The economy has recorded uneven expansion in recent years as an unprecedented period of mining investment reaches its end, with the Reserve Bank of Australia (RBA) cutting interest rates to a record-low of 1.5 percent to support growth.
Household spending jumped 0.7 percent during the quarter to contribute 0.4 percentage points to growth, while net exports added 0.1 percent, while government expenditure rose 1.0 percent in the period to continue its stellar growth through the year.
The stronger data reinforced expectations that the next move of the RSB would be to lift rather than cut interest rates, but analysts said any hike was not likely in the near-term, with wages growth and inflation remaining soft.
“Despite solid growth, the economy is not generating much in the way of wage or price pressures,” Commonwealth Bank of Australia senior economist Gareth Aird said in a note. “There is still plenty of slack in the labor market to chew through.”
Analysts said that exports growth was expected to level out in the second half of the year, while house prices — particularly in the larger cities — were also falling this year as tighter lending standards discourage local and international investors.
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