Australia Grows 3.5% in First Quarter

Australia’s economy grew 3.5 percent on-year in the first quarter, its fastest pace in nearly two years, data on Wednesday showed.

The rise in gross domestic product (GDP) followed a 2.8 percent increase in the fourth quarter and compared with analyst forecasts in a Reuters poll for a 3.3 percent rise.
Economists had anticipated a strong number after current account data on Tuesday showed that net exports added 1.4 percentage points to GDP in the first quarter.

“It’s a fantastic outcome given expectations for sub-trend growth,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.
“But a lot of things occurred that won’t be repeated in subsequent quarters. For example, we saw a huge surge in resource exports, particularly iron ore,” he added. “I think they will remain strong, but you won’t get the same growth rate repeated again which is what you will need for that kind of GDP growth.”

The data comes a day after the Reserve Bank of Australia (RBA) left its key interest rate unchanged at a record low of 2.5 percent and said that there was likely to be a period of stability in interest rates.

via CNBC

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