A 3% annualized rate of expansion for Australia’s economy in the last 3 months of 2015 beat consensus forecasts for a flat measure and beating the previous quarter’s 2.5%.

The world’s 12th largest economy has faced considerable challenges in recent years as prices for its natural resource-based exports have plunged because of a marked decline in demand from China, its biggest trading partner and a general supply glut around the world.

“Compared to other economies dependent upon commodities for growth, Australia is doing relatively well but there are some fairly dark clouds on the horizon,” explained Jim Brechin, Chief Asian markets strategist at Japan-based broker-dealer, Resona Partners.

The country has produced a slew of soft economic indicators recently, the most disturbing of which is a spike up in unemployment after the loss of nearly 8,000 jobs which took the official rate up to 6.4%. “The spike was unsettling since the unemployment rate has been stuck in a range between 6.1 – 6.3% since last summer. That had raised hopes that the worst was over in terms of job losses,” added Brechin.

The Reserve Bank of Australia, the country’s central bank, has held rates steady for 10 months resisting calls for a cut from the current 2%. Despite relatively high rates, however, the outlook for the Australian dollar remains gloomy, according to Resona Partners.

“While we see some easing of the downward pressure on commodities prices, we don’t see the kind of improvement necessary for a return to the heady days of 2009/10,” said Brechin.

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