"The return of the Australian economy in the second quarter to the growth rates seen before the end of the mining boom relieves some of the pressure on the RBA to cut interest rates again, at least in the next few months".
- Paul Dales, Capital Economics
The latest data shows that Australian economy is showing its strongest growth since 2012 confirming that long period of decline might be coming to end. According to data released by the Australian Bureau of Statistics, real Gross Domestic Product expanded by 0.5% in the June quarter, slightly below expectations for an increase of 0.6%. The quarterly advance was influenced by household and public consumption spending. As a result, the year-on-year growth rate reached 3.3%, showing the fastest pace seen in four years. This release, in turn, was in line with economist forecasts, and well above the 2.75% pace predicted by many forecasters. The March quarter GDP growth rate, previously reported as a rise of 1.1%, was revised down to 1.0%. Moreover, on an annualized basis, the economy grew by 2.9% in real terms during the 2015/16 financial year. The largest contributors to this growth were mining (0.8%), financial and insurance services (0.5%), public administration and safety (0.3%), construction (0.2%) and wholesale trade (0.2%) industries.
In the meantime, the Australian dollar slipped on the data, losing 0.1 of a cent versus the dollar.
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