Australia: GDP expansion driven by highest increase in exports in over 10 years
June 4, 2014
In the first quarter of the year, GDP grew a seasonally-adjusted 1.1% over the previous quarter. The increase exceeded both the 0.8% expansion recorded in the fourth quarter and market expectations of a 0.9% rise. On an annual basis, GDP expanded 3.5%, which marked an acceleration compared to the 2.7% expansion recorded in Q4 and was the fastest pace of growth since Q2 2012.
In Q1, both internal and external demand contributed to the quarterly acceleration. On the domestic front, fixed investment was flat over the previous quarter, which was an improvement over the 1.1% contraction seen in Q4. Private consumption decelerated slightly compared to the previous quarter (Q4: +0.8% quarter-on-quarter; Q1: +0.5 qoq) and government consumption increased 0.4%, which mirrored the result tallied in Q4 2013. That said, inventories shaved off 0.6 percentage points from overall economic growth in Q1, after having added 0.2 percentage points in Q4.
On the external front, the economy benefited substantially from the expansion of exports. Overseas sales surged 4.8% over the previous quarter (Q4: +1.1% qoq), which marked the strongest expansion since Q3 2000. Imports, on the contrary, contracted 1.5% (Q4: -0.6% qoq). As a result, the external sector’s net contribution to overall growth, improved from 0.4 percentage points in Q4 to 1.4 percentage points, which was the strongest contribution since Q1 2009.