Australian economy gathers steam in Q2
> Shrugs off sluggish start to the year, second quarter GDP rises 0.8% on govt and consumer spending
SYDNEY: Australia’s economy has shrugged off a sluggish start to the year, boosted by government and consumer spending with the nation extending its record run of growth, official data showed yesterday.
Economic growth for the secondquarter was 0.8%, after 0.3% in JanuaryMarch, to take the annual rate of expansion to 1.8%, the Australian Bureau of Statistics said.
“Today’s national accounts for the June quarter reveal solid and more balanced growth for our economy,” Treasurer Scott Morrison told reporters in Canberra. “(It confirms) the emerging national economic consensus of the better-days-ahead outlook that I referred to in this year’s budget.”
The stronger reading came after the economy marked a world-record 26 years without a recession, even as growth slowed at the beginning of the year with the impact of category four Cyclone Debbie on eastern Australia.
The Australian dollar slipped slightly below 80 US cents (RM3.39) after the data release, with investors disappointed that the latest GDP reading was marginally softer than some analysts’ estimates.
The figures showed that household spending rose by 0.7% and government expenditure by 1.2%, while exports of goods and services increased by 2.7% for the period.
The Australian economy has charted a rocky path as it transitions away from an unprecedented mining boom, with the Reserve Bank of Australia cutting interest rates to a record-low of 1.5%.
The central bank on Tuesday kept rates on hold at 1.5% for the 13th straight month, but signalled optimism about recent improvements in the economy. They include a strengthening jobs market, business conditions and sales.
Economists said the economy may have passed its trough, although wages growth, which has been tepid, still needed to strengthen further to boost consumption levels.
“It’s not saying the economy is booming but it seems to have reached bottom, I think, clearly,” National Australia Bank chief markets economist Ivan Colhoun told AFP.