Australia: Economic growth accelerates in Q4
March 5, 2014
In the fourth quarter, GDP grew a seasonally-adjusted 0.8% over the previous quarter. The increase exceeded both the 0.6% expansion recorded in the third quarter and market expectations of a 0.7% rise. On an annual basis, GDP expanded 2.8%, which marked an acceleration compared to the 2.4% expansion recorded in Q3.
While the external side of the economy performed a tad below Q3's figures and domestic demand experienced a slight deceleration in Q4, overall economic growth was supported by better performance in inventories, which had dragged down growth in the previous quarter. Domestic demand rose 0.2% over the previous quarter, which was down from the 0.6% expansion seen in the third quarter. Private consumption improved slightly from a 0.7% expansion in Q3 to a 0.8% increase in Q4, whereas public spending decelerated to a 0.4% rise (Q3: +1.0% quarter-on-quarter). Fixed investment deteriorated markedly in Q4, contracting 1.2% (Q3: +0.0% qoq).
Conversely, the external side of the economy performed virtually at the same level as in Q3. While exports of goods and services rose 2.4% (Q3: +0.1%), imports declined 0.6% (Q3: -3.4% qoq). As a result, the external sector's net contribution to overall growth inched down from 0.7 percentage points in the third quarter to 0.6 percentage points in the fourth.
FocusEconomics Consensus Forecast panelists see the economy expanding 2.8% in 2014, which is up 0.1 percentage points from last month's forecast. For 2015, the panel expects economic growth to accelerate to 2.9%.