|
 |
| Australia's economic growth slows |
|
Time is GMT + 8 hours
Posted: 3-Dec-2008 22:57 hrs |
|
| Shoppers pass signs for a store holding a sale in Sydney. Australia's economy grew by just 0.1 percent in the third quarter, its slowest in eight years, figures showed Wednesday, but the government hailed the slight expansion amid the global financial meltdown. |
| |
|
|
Australia's economy grew by just 0.1 percent in the third quarter, its slowest in eight years, figures showed Wednesday, but the government hailed the slight expansion amid the global financial meltdown.. Treasurer Wayne Swan said the performance, which also showed year-on-year growth of 1.9 percent, was "a positive outcome" compared to other developed countries which were headed into recession.. The United States, Britain, Germany, Italy, Spain, Japan, Singapore and Hong Kong all recorded negative growth in the three months to September, Swan said.. "Something like two-thirds of OECD economies are expected to contract in 2009," he told a news conference. "So while other economies are contracting, our economy continues to grow.". The growth in gross domestic product (GDP) over the quarter, announced by the Australian Bureau of Statistics, was slightly lower than the 0.2 percent expected by most economists.. It was the worst result since the December quarter of 2000, when the economy shrank by 0.9 percent.. The annual rate of 1.9 percent was also below the government's mid-year economic forecast of 2.0 percent growth over the financial year ending in June 2009.. Australian share prices closed up 0.2 percent in a volatile session after an early surge based on an overnight Wall Street rally ran out of steam.. A factor in investors' minds was the economic growth figure which "is further evidence the Australian economy is dangerously close to being in recession," said CMC Markets analyst David Taylor.. The International Monetary Fund forecast recently that Australia's GDP would fall to about 1.8 percent over the year as the global economy slows.. Swan said that while Australia could not resist the pull of global forces a range of factors was working in its favour, including a 10.4 billion dollars (6.76 billion US) government fiscal stimulus package.. The package primarily targets pensioners, low- and middle-income families, carers and first-home buyers, and is aimed at boosting consumer spending.. The central bank's 300 basis points cut in interest rates since September -- to its lowest level in six years -- was also helping, along with lower petrol prices and a depreciation in the Australian dollar, Swan said.. The country had a strong, well-regulated financial system and plenty of policy ammunition to help protect the economy "from the worst that the world can throw at us," he said.. The stimulus package and rate cuts by the Reserve Bank of Australia (RBA) are widely expected to help the economy as they take effect but economists are split on whether a recession can be avoided.. "The RBA is doing all it takes to keep the economy out of recession and so too is the government. We believe the economy will avoid a recession," Craig James of Commonwealth Securities told Dow Jones Newswires.. But JPMorgan economist Helen Kevans said Australia would be unable to avoid its first recession since the early 1990s, predicting a 0.3 percent contraction in the fourth quarter followed by a 0.2 percent shrinkage in the first quarter of 2009.. Commonwealth Bank chief economist Michael Blythe said the economy "has dodged the bullet for the moment at least, and could do enough to escape negative territory in quarters ahead.". "I think there's enough there to scrape through, but clearly there's not much margin for error," he added. — AFP
|
