The Australian economy remains sluggish but is benefiting from a boost in resources exports.
Australia’s economy grew by 0.6 per cent in the June quarter, figures released by the Australian Bureau of Statistics show, in line with economists expectations.
Gross domestic product for the (GDP) growth for the 12 months to June was 2.6 per cent.
HSBC Australian chief economist Paul Bloxham said the figures showed the economy was growing at a “modest” rate.
“Overall, the Australian economy is a bit sluggish but there are certainly no signs things are slowing substantially,” he said.
Rising resources exports were playing an increasingly important role as a driver of economic growth, Mr Bloxham said.
“Resources exports are starting to be a key support for growth but at the same time domestic demand is fairly weak,” he said.
“There are still few signs the economy is rebalancing, aside from the pick up in the established housing market, but we expect that is yet to come.”
National Bank of Australia senior economist David de Garis said the data showed some cause for concern, despite the 0.6 per cent growth figure exceeding forecasts.
“It was a little bit better than what we expected, but the details are … far from reassuring,” he said.
Private sector spending was particularly soft despite the Reserve Bank of Australia’s efforts to stimulate growth.
“We’ve seen consumer spending only growing by 1.8 per cent over the course of the past year,” he said.
The dwelling investment recovery also appeared to have “run out of steam” through the middle of year, he added.
Westpac chief currency strategist Robert Rennie said some economists were forecasting very weak growth of 0.2 per cent for the quarter, so it was a relief June quarter growth was 0.6 per cent.
The Australian dollar rose almost half a US cent after the figures were released.
However, the details of the GDP report showed that consumers are still reluctant to spend.
“It doesn’t feel that there is too much to crow about in the data on that basis,” Mr Rennie said.
“Household demand is not show signs in filling the gap in economic growth again.
The rise in the rate of savings is certainly indicative of an anxious household sector.
“So it’s underwhelming on economic growth.”
