GDP: Australia's economic growth improves but disappoints the optimists

Share

It was helped by the -0.3% figure for the September quarter 2016 falling out of the calculation (a figure affected by the drop in economic activity before the July 2016 election).

"The solid 0.6 percent growth outcome in the September quarter national accounts has accelerated growth from 1.9 percent to 2.8 percent through the year", Treasurer Scott Morrison told reporters in Canberra.

The Australian dollar slid about a quarter of a US cent as market participants essentially lowered their expectations that Australia's central bank-already in a lengthy holding pattern-will take action on interest rates anytime soon.

The improved annual growth figure was assisted by the negative September quarter data from previous year dropping out, and it takes Australia close to what would be considered average levels of economic expansion.

Capital Economics' chief economist for Australia and New Zealand Paul Dales said he did not expect GDP growth next year to meet the RBA's 3.0 percent forecast.

However, household consumption was "soft" even though October's retail sales figures, released on Tuesday, showed some improvement.

He said Australia's economy was growing faster than the average growth rate of Organisation for Economic Cooperation and Development countries (at 2.6%), putting the economy "back up towards the top of the pack of major advanced economies".

Panel report claims Max Hospital guilty
On Saturday, Jain had said that strict action would be taken against the hospital and if required its licence would be cancelled . The inquiry found out that the hospital authorities didn't do an ECG, to find if the babies were dead.

For private investment, the contribution to our growth more than tripled in the September quarter. The statistics bureau said Wednesday that 17 of 20 industries recorded positive growth in the quarter.

"The big concern is whether households, the engine of the economy, accept that expectations of a lift in wages growth are unjustified and it becomes necessary to adjust spending to a lower income outlook".

"The performance of the economy in 2018 will largely come down to whether stronger business investment can continue to compensate for weaker dwellings investment and consumption, as it did in the third quarter", he said.

Bill Evans, chief economist at Westpac, said pressure is building on consumers and it is forcing a change in spending patterns that threatens to choke off growth. This weak household spending combined with growth in household income resulted in an increase in the household saving ratio for the first time in five quarters.

WA was just behind NSW in terms of economic activity through the quarter.

"We have now seen four consecutive quarters of investment growth, following 12 consecutive quarters of decline".

Share