- Treasurer Joe Hockey
The Australian economy grew less than expected in the second quarter, due to a slowdown in its leading trading partner China, which weighed on exports. Australia's gross domestic product rose 0.2% from the first quarter of the year, when the nation's economic output rose 0.9%. Economists, however, had expected a 0.4% gain. The economy expanded an annualized 2.0% last quarter, slowing from 2.3% in the first quarter. The main factors, which triggered the slowdown in economic growth, were reduced mining and construction activity. Mining production tumbled 3% over the second quarter, while net exports slumped 3.3%, detracting 0.6 percentage points from GDP growth in the reported quarter. In positive news, household spending propped up growth, increasing by 0.5% for the period and adding 0.3% point to the economy's expansion, while government expenditure surged 2.2%.
The Reserve Bank of Australia is currently predicting GDP growth to be around 2-3% in 2015 and 2016 before accelerating slightly. Earlier in the week the central bank maintained interest rates at a record-low 2.0% to support growth, while the nation's unemployment rate has stayed around a decade-high of 6.0% over the past few months.
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