Australia’s gross domestic product (GDP) has grown at its slowest pace since the GFC as stimulus measures start to wear off. Seasonally adjusted GDP grew at just 0.2 percent in the September quarter surprising the market which expected approximately 0.5% growth. Looking closer at the results, a strong result in Agriculture contributed 0.4 percentage points to the GDP. If it wasn’t for such a strong result, the economy would be going backwards. Non-farm GDP contracted 0.2 percentage points.
Treasurer Wayne Swan put his positive spin on the results, saying the figures is “another solid result for our economy in the context of a world economy which is fragile” and that “The Australian economy remains resilient.”
Today’s soft result is likely to mean Interest Rates are on hold for the foreseeable future.
The question now remains, has Australia really dodged the bullet or is it still coming our way?
ยป 5206.0 – Australian National Accounts: National Income, Expenditure and Product, Sep 2010 – ABS, 1st December 2010.
Love the DROP in net Exports (Mining boom anyone??) If it wasn’t for Agricultural exports the figures would have been far worse, which makes one wonder just how much of the “Commodities Boom” story is hype.
If we’re in a “Booming” economy, and “everything’s going well acc. to “The Plan””, I’d really hate to see the economy when things were not going “accordig to the plan”. Probably the next major Stats releast might give us an insight on the latter scenario!
You can’t blame people for not spending as they have to service these ridicously high depts, and if people do spend they would shop online as with the Aussie Dollar so high you can buy stuff in USA and Europe for half the price of what Australian retailers charge.
There may be a few sectors of the economy booming, but you will soon see many other sectors fall into the red such as retail, manufacturing and construction.
Interest rates in my opinion will not move for many more months (I am talking the reserve bank) to come as people aren’t as gullible as they once were and will restrict spending and start saving. At the end of the day people are forking out around 40-50% of their disposable income paying off a mortgage – crazy but true! In Sydney a mortgage of $400,000 is quite normal, which equates to an annual repayment of around $36K (around $3K/month) The average disposable family income is about $70-75K based on a family gross income of around $100K.