Aus­tralia see 25 years of un­bro­ken eco­nomic ex­pan­sion

The Myanmar Times - - Business -

AUS­TRALIA’S econ­omy grew by 0.5 per­cent in the June quar­ter with an up­swing in gov­ern­ment spend­ing off­set­ting a fall in net ex­ports as the na­tion marked 25 years of un­in­ter­rupted eco­nomic ex­pan­sion.

The Aus­tralian Bureau of Sta­tis­tics data, which showed an­nual growth at 3.3pc, was in line with ex­pec­ta­tions as the econ­omy con­tin­ues its shift away from an un­prece­dented boom in re­sources in­vest­ment.

“It’s of­fi­cial, Aus­tralia has now achieved 25 years of un­in­ter­rupted eco­nomic ex­pan­sion,” said Trea­surer Scott Mor­ri­son.

A 1.1pc ex­pan­sion in the Jan­uaryMarch quar­ter was driven by net ex­ports and house­hold spend­ing, but ex­ports – a key growth en­gine – were a drag for the April-June num­ber.

Over the three months, they de­tracted 0.2 per­cent­age points from GDP with stronger-than-ex­pected gov­ern­ment spend­ing the saviour as pub­lic in­vest­ment grew by 15.5pc quar­ter-on-quar­ter.

The Aus­tralian dol­lar, which climbed ahead of the data, fell slightly after the an­nounce­ment to 76.58 US cents but soon re­cov­ered.

Cap­i­tal Eco­nomics chief Aus­tralia econ­o­mist Paul Dales said the quar­terly growth was “a good re­sult” and should ease pres­sure for fur­ther in­ter­est rate cuts.

“The re­turn of the Aus­tralian econ­omy in the sec­ond quar­ter to the growth rates seen be­fore the end of the min­ing boom re­lieves some of the pres­sure on the RBA to cut in­ter­est rates again,” he said.

The Re­serve Bank has held in­ter­est rates at a record low of 1.5pc, hav­ing cut them twice in the past four months in a bid to boost slug­gish in­fla­tion as the econ­omy tran­si­tions to­ward non­re­sources growth.

‘[The growth] re­lieves some of the pres­sure on the RBA.’

Paul Dales Cap­i­tal Eco­nomics

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