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Australia’s economy continues to perform well, grows 0.9% in Q3

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 2, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - Australia has not experienced any technical recession since the June quarter of 1991. It has continued to register growth and had performed well even during the Asian and global economic crisis. The growth story has continued in the third quarter of the current fiscal. The Australian Bureau of Statistics today reported Australian economic grew slightly more than expected in the July-September quarter of 2015. The economy increased 0.9% to record 2.5 per cent growth in the three months through September compared to the same period last year. The growth figure is way better than the 0.2 per cent growth registered in the June quarter. Markets had expected a 0.8 per cent growth, with the annual rate moving up to 2.4%.

    The growth pace however has been moderate. A top central banker feels that performance of the economy can actually be deemed "respectable" considering the scale of the mining boom that the country has witnessed. China’s slowdown that has impacted Australia’s commodity exports has caused the growth pace to be moderate.

    Factors that boosted GDP and issues which weighed on growth

    Exports of goods and services contributed the most to the third quarter GDP. Goods and services export moved up 4.6 and contributed 1.0 per cent to the final growth figure. Imports on the other hand fell by 2.4%. Imports contributed 0.5 per cent to growth. Mining activity was up 5.2 on quarter. It helped to move up the net exports component which contributed 1.5 per cent to GDP growth.

    Household final consumption expenditure, which in essence constitutes the largest part of the Australian economy, increased 0.7%. It contributed 0.4 per cent to the GDP increase. Government consumption expenditure also increased 0.4 per cent, contributing 0.1 per cent to growth.

    Gross fixed capital formation, both from the public and private sectors was low and offset the positive contributions to GDP. Investments in both mining as well as non-mining businesses also remained weak. Public sector investment also fell. The investment in the public sector dropped 9.2% on falling military spending, and detracted 0.4 per cent from the final GDP figure. Inventories subtracted 0.1 per cent from GDP growth.

    Mining related construction plunged 7.1 per cent. Non dwelling construction in the private sector fell 5.3%, subtracting 0.4 per cent from growth. Machinery and equipment spending declined 4.6% on weak business capex report released late last week, subtracting 0.2 per cent from growth.
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