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Australia's economic growth slows as exports decline

Wednesday, Sep 02 2015
Gross domestic product advanced 0.2% from the first three months of the year, when it rose 0.9%, government data showed Wednesday. That compared with the median of 27 estimates for a 0.4% gain and was the weakest result since 2013. Firms in Australia - an engine room of the decade-long global commodity boom - plan to cut investment in the next 12 months, betting they can meet demand from heavily indebted households with existing capacity. The report spans a period when Australia cut interest rates for the second time this year to a record-low 2% to offset falling commodity prices. 
 
Compared with a year earlier, the economy expanded 2% in the second quarter, the report showed, less than economists’ forecast of 2.2%. General government spending rose 2.2% in the second quarter, adding 0.4 percentage point to GDP growth, the report showed. Household spending advanced 0.5% last quarter, adding 0.3 point to the expansion, it showed. Exports slumped 3.3%, subtracting 0.7 percentage point from GDP growth while dwellings fell 1.1%, subtracting 0.1 point.
 
After the data Aussie fell below 0.70 handle but managed to rebound and is currently being traded few points above 0.7020 level. Pair is likely to find support around 0.6970 level and resistance above 0.7060 area. Later today, in the US session, GDP figures are scheduled for a release.
More in this category: « Eurozone Unemployment Rate at the lowest level since February 2012 Number of unemployed in Spain up by 21,679 »

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