- Paul Dales, Capital Economics' economist for Australia
The Australian economy beat all expectations, growing at the fastest pace in almost two years in the final quarter of 2015, a sign the worst of the global commodity rout may be over. Australia's gross domestic economy rose 0.6% in the fourth quarter from the July-September period, when the economy grew an upwardly revised 1.1%, outpacing economists' forecast for a 0.4% growth, according to the Australian Bureau of Statistics. That propelled growth for the whole year to 3%, compared with 2.5% that had been expected by analysts. Consumers were the main driver of growth, with household consumption expenditure increasing 2.9% annually. Households spent more last year even though their wages rose just 2.2%, the slowest annual rate on record. The improvement of labour demand over the last year despite weak economic growth levels has been an important measure of the economy's strength through mining downturn, and something that surprised policy makers.
While most economists expect last year's GDP figure would diminish the RBA's easing bias towards interest rates, some say low inflation could still force policy makers to act. The central bank estimates the worst of the drag from mining will be over this year, while all-time low rates, increasing house prices and a boom in home building continue to spur domestic demand.
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