Economic growth slower than expected

Andrew Cummings
December 6, 2017

Continuing its record-breaking streak of uninterrupted economic growth, Australia has posted modest growth in the first quarter of the new financial year.

Australia's economy expanded 0.6 per cent in the September quarter and grew 2.8 per cent over the 12 months to September, official figures show.

Despite higher household income, household consumption was weak at 0.1 percent, in line with the retail trade estimates.

The Australian dollar slid about a quarter of a USA cent as market participants essentially lowered their expectations that Australia's central bank-already in a lengthy holding pattern-will take action on interest rates anytime soon.

Economists surveyed by Reuters had typically economic growth of 0.7 per cent in the September quarter and 3 per cent over the past year.

Non-dwelling construction added 0.9 percentage points to growth during the quarter, more than offsetting a 0.1 percentage point decline from residential building.

Treasurer Scott Morrison used the opportunity to passionately call on the public to support the government's proposed income tax cuts in order to stimulate more growth in the economy.

So far this year, Australia had experienced the strongest jobs growth in 40 years, with four out of five jobs being full-time, he said.

This came despite compensation for employees increasing by 1.2 per cent for the quarter and 3.0 per cent over the past 12 months.

In the June quarter, gross domestic product rose by a revised 0.9 per cent, the Australian Bureau of Statistics (ABS) said on Wednesday.

The main driver of economic growth had been public and private investment.

The Treasurer also outlined a small lift in wages growth, a key component to sustaining economic growth.

Meanwhile, spending on electricity, gas and other fuels went up 11.5 per cent and cigarettes and tobacco went up 11.1 per cent.

"The sentiment in China has turned less positive after the conclusion of the National Party Congress, as the deleveraging rhetoric has returned to the market, especially with regards to real estate speculation", Mr McKay said.

Other reports by iNewsToday