June numbers add up
ECONOMIC growth improved to 0.8 per cent in the June quarter, driven by stronger commodity exports and public spending, and improved household consumption. The increase in the growth rate from the March quarter’s 0.3 per cent took annual economic growth to 1.8 per cent, the Australian Bureau of Statistics said yesterday. The rate of growth was slightly weaker than expected, with economists forecasting growth of 0.9 per cent in the quarter and 1.9 per cent for the year. After hitting a one-month high of US80.28 cents overnight, the Australian dollar fell back below US80 cents after the release of the data. Commonwealth Bank senior economist Gareth Aird said the June quarter numbers were solid. “The output side of the economy looks relatively healthy and we should see some further strength in real GDP growth,” Mr Aird said. But weak household income growth continued to weigh on consumers, he said. Household consumption rose 0.7 per cent in the June quarter, with spending on food, clothing and furniture increasing. That contributed the equivalent of 0.4 percentage points to the quarterly GDP growth. Mr Aird said the rise in spending was generated by a fall in the level of savings. Higher government investment added another 0.6 percentage points to quarterly GDP growth, and exports rose 2.7 per cent in the June quarter, adding 0.6 percentage points to growth. Weaker private sector spending and inventories detracted from the growth rate. AAP