Australian economy expands 0.6 percent in third quarter
By Amy Coopes, AFP
December 5, 2013, 12:24 am TWN
SYDNEY--Mining-powered Australia expanded a modest 0.6 percent in the three months to September and 2.3 percent on-year, showing a transitioning economy “stuck in second gear,” the government said Wednesday.
The Australian Bureau of Statistics figures came in short of analyst forecasts of 0.8 percent for the quarter and 2.6 percent on-year, underscoring the challenges for the commodity-rich nation as it transitions away from a decade of dependence on mining.
“The fact is the economy is stuck in second gear,” Treasurer Joe Hockey told reporters.
“Today's numbers are a reminder of the tough trading conditions in the economy, particularly outside of the mining sector.”
Hockey said the disappointing data, which saw the Australian dollar fall almost a full U.S. cent from 91.35 U.S. cents to as low as 90.48 cents, reflected a slowdown in the resources sector.
“The fact is the mining companies are not importing new capital, and that clearly illustrates that we have some challenges ahead as mining investment drops from around eight percent of GDP to somewhere around three percent over the next few years,” he said.
“That is going to create a growth hole in the economy.”
He said the budget had “deteriorated significantly” and the previous government's pre-election growth forecasts of 2.5 percent in 2013-14 and 3.0 percent in 2014-15 would not be met.
The year-on-year growth rate of 2.3 percent was well below long-term averages of about 3.25 percent.
Commodities continued to underpin growth, contributing 0.3 percent to the increase in gross domestic product in the quarter, according to the ABS.
But Australia's terms of trade, a measure of export prices versus import prices, fell 3.3 percent in the quarter as commodity prices plunge amid slowing demand from China and new supply flooding the market.