CANBERRA: Australia’s economy expanded at a quicker pace than economists forecast in the third quarter, driven by the fastest gain in exports since 2000, and supporting the central bank’s decision Tuesday to keep interest rates steady.
Gross domestic product advanced 0.9 percent in the three months through September from the previous quarter, when it rose a revised 0.3 percent, government data showed Wednesday. That compared with the median of 28 estimates for a 0.8 percent gain. The picture inside Australia was a little less rosy than the headline, as domestic demand contracted by half a percent in the three months, the biggest decline since 2009.
The report spans a period when Australia’s currency dropped almost 9 percent in response to record-low interest rates as the central bank sought to spur investment outside the resources industry. The GDP data was mainly a story of a recovery in export volumes that had been constricted by storms that shut ports in the second quarter.
“When you look at the composition of growth it was a little less encouraging,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. “We’re very much stuck in that sub-par pace of growth at around 2.5 percent. I think this is where we’re going to be for the next little while.”
