Australia: GDP picks up in Q2
September 7, 2011
In the second quarter, GDP expanded 1.4% over the same period the previous year, which was up from the 1.0% expansion recorded in the first quarter and beat market analysts' expectations of 1.0% rise. The print improved on the first quarter result, which had been strongly affected by the Queensland floods at the beginning of the year. Quarterly figures provide further evidence of the waning impact of the floods, as the economy expanded a seasonally adjusted 1.2% quarter-on-quarter, contrasting the 0.9% contraction in Q1. The second quarter expansion was mainly driven by resilient domestic demand and a positive contribution from inventories, which compensated for a dragging external sector. Domestic demand (excluding inventories) expanded 3.4% annually, down from the 3.9% expansion seen in the first quarter. In particular, private consumption expanded 3.2%, down from the 3.5% increase recorded in the first quarter. Fixed investment expanded 3.8% in Q2, which was below the 4.3% increase registered in the previous quarter. Exports of goods and services contracted 3.7%, slightly up from Q1's 4.4% drop, while imports rose 10.5%, up from the 9.4% expansion in the previous quarter. As a result, the net contribution from the external sector to overall growth fell from minus 3.2 percentage points in the first quarter to minus 3.4 percentage points. In its August Statement on Monetary Policy, the RBA revised down its growth forecast for the year, from a previously expected 3.25% to the current 2.0%. Next year, the RBA sees growth at 4.5%.
Author: Armando Ciccarelli, Head of Data Solutions