Australian Economy Grows More Than Expected


Posted June 13, 2016 by monexBMOsecurities

Rising exports and better household spending help Aussie economy post 1.1% Q1 GDP.

 
Australia's economy expanded at a better-than-expected rate of 1.1% in the first three months of 2016 compared to consensus forecasts for 0.8% growth. GDP was boosted by improved exports and a rise in consumer spending.
On an annualized basis, the economy grew 3.1% in the three months to March.
In addition to the boost provided by exports and household spending, service-based industries, finance and the retail trade played a part in the better-than-expected figures.
Australia has been trying to rebalance its economy to rely less on the mining boom that enabled it to emerge essentially unscathed after the global financial crisis of 2008 and the recession that followed in its wake.
“The sharp economic slowdown in China, the largest customer for its iron ore and other commodities, has seen growth in Australia’s economy tail off in sympathy with rising unemployment and tepid growth,” said Monica Freeman, chief markets strategist at Monex Financial.
After the GDP news, the Australian dollar jumped by nearly half a cent against the US dollar as investors bet the good news would likely discourage the Reserve Bank of Australia from cutting interest rates further when it next convenes to set monetary policy.
Last month, it cut its benchmark interest rate to a historic low of 1.75% in response to lower-than-expected inflationary pressures. Australians are set to go to the polls on 2 July after one of the longest election campaigns in the country's history.
Prime Minister Malcolm Turnbull has called the election several months before time after the country's upper house continually blocked legislation.
About Monex Financial
Monex Financial is a privately held, fully independent investment and wealth management leader, with retail operations based in Toronto, Canada and corporate trading division headquartered in Tokyo, Japan.

From our offices in Toronto the capital city of the province of Ontario and financial and business capital of Canada, we serve private individuals and families from N. America to Europe and with our corporate trading division strategically located in Tokyo, Japan, we have unrivalled access to Asia’s high yielding emerging markets, access to corporate resources, private equity and global mergers and acquisitions.
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Last Updated June 13, 2016