CANBERRA: Australian economy has showed growth of 0.5% in the December quarter and 2.5% in 2014, which was slightly worse than market expectations.
The December quarter growth follows a 0.4% rise in gross domestic product (GDP) for the September quarter, the Australian Bureau of Statistics (ABS) said on Wednesday. Commonwealth Bank senior economist, Michael Workman, said the data showed some signs of life in the non-mining parts of the economy, but Australia still had a long way to go.
“Consumer spending looked to be a little bit stronger than a lot of people thought and also residential construction,” he said.“Annual growth of 2.5% is still well away from where it needs to be, which is closer to three per cent or a little bit over three per cent and it will be a while before the unemployment rate peaks.” Workman was not confident that economic growth would strengthen this year and said there would need to be another one or two interest rate cuts in the next few months to boost growth.
“Last quarter, we grew at 0.4% and now we’re growing at 0.5% – they’re both pretty unimpressive growth prints,” Kennedy said. “Really what it boils down to is that all of that is coming from net trade, which has a very low multiplier to domestic growth prospects and domestic employment prospects. “So it’s not a good number from that point of view for the economy and is consistent with the idea that the cash rate will move lower this year.”
