Australia: GDP picks up in Q3
December 7, 2011
In the third quarter, GDP expanded 2.5% over the same period the previous year, which was up from the 1.9% expansion recorded in the second quarter (previously reported: +1.4% year-on-year) and beat market analysts' expectations of a 1.9% rise. The third quarter expansion was mainly driven by resilient domestic demand, which compensated for a dragging external sector. Domestic demand (excluding inventories) expanded 4.6% annually, up from the 3.0% rise seen in the second quarter. In particular, fixed investment expanded 8.7% in Q3, which was up from the 3.5% increase registered in the previous quarter and marked the strongest reading since Q2 2010. Finally, private consumption expanded 3.8%, up from the 3.1% increase recorded in the second quarter. Exports of goods and services rose 0.8%, contrasting the Q2 3.6% drop, while imports rose 13.8%, up from the 9.1% expansion observed in the previous quarter. As a result, the external sector's net contribution to overall growth inched down from minus 2.6 percentage points in the second quarter to minus 2.7 percentage points. Quarterly figures corroborate the positive result seen in annual figures, as the economy expanded a seasonally adjusted 1.0% quarter-on-quarter, which was, nonetheless, down from the 1.4% increase in Q2. In its November Statement on Monetary Policy, the RBA revised down its growth forecast for the year, from a previously expected 2.0% to the current 1.75%. Next year, the RBA sees growth at 4.0%.
Author: Armando Ciccarelli, Head of Data Solutions