Australia economy rebounds in Q2

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Despite a slow start to the year, Australia’s economy rebounded in the second quarter (Q2), extending its record run of growth on the back of government and consumer spending, official data showed Wednesday.

Economic growth for Q2 was 0.8 percent, after 0.3 percent in January-March, to take the annual rate of expansion to 1.8 percent, the Australian Bureau of Statistics said.

"Today's national accounts for the June quarter reveal solid and more balanced growth for our economy," Treasurer Scott Morrison said.

The stronger reading came after the economy marked a world-record 26 years without a recession, even as growth slowed at the beginning of the year with the impact of category four Cyclone Debbie on eastern Australia.

The Australian dollar slipped slightly below 80 US cents after the data release, with investors disappointed that the latest GDP reading was marginally softer than some analysts' estimates.

The figures showed that household spending rose by 0.7 percent and government expenditure by 1.2 percent, while exports of goods and services increased by 2.7 percent for the period.

The Australian economy has charted a rocky path as it transitions away from an unprecedented mining boom, with the Reserve Bank of Australia (RBA) cutting interest rates to a record-low of 1.5 percent.

The central bank on Tuesday kept rates on hold at 1.5 percent for the 13th-straight month, but signaled optimism about recent improvements in the economy.

They include a strengthening jobs market, business conditions and sales.

The RBA has been cautious about lifting rates despite the improvements, with concerns that high levels of household debt and strong property prices could make Australians vulnerable to rising borrowing costs.

Source(s): AFP