Australia second quarter GDP growth slower than expected
Sydney, Australia (4E) – Government data released on Wednesday showed Australia’s economy grew at a slightly slower rate for the second quarter of this year.
Australian Bureau of Statistics (ABS) announced that GDP growth for the three months ending June is at 0.6 per cent. This is slightly lower than what most economists estimated of 0.7 per cent growth.
Growth for the period was boosted final consumption expenditure which grew 0.6 per cent and net exports which rose 0.3 per cent. The report also showed that public spending in the second quarter was up by 1.6 per cent, contributing 0.3 per cent to GDP growth.
Despite the economy posting its fastest first-half expansion in five years, economists are concerned with the massive scaling back in project by mining companies like BHP Billiton Ltd. as prices of iron ore — the country’s biggest export commodity valued at A$60bn a year– continue its drop.
In response to slumping manufacturing and services due to the rising Australian dollar in recent months, the Reserve Bank of Australia (RBA) has cut benchmark rates in May and June.
During a policy meeting on Tuesday, the RBA held interest rates steady at 3.5 per cent but kept a cautious outlook amid falling gains from commodity exports due to increasing uncertainty in the Chinese economy, Australia’s biggest buyer of iron ore.
Since July, spot iron ore has already lost almost a third of its value. Shipments of iron ore contributes 60 per cent to the country’s total exports.