Aussie GDP increases by a stronger-than-expected 1.2%

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The Australian economy has returned to growth in the June quarter after suffering a downturn in the previous quarter because of the floods and cyclones over the summer, official figures show.

Gross domestic product (GDP) rose by 1.2 per cent in the June quarter, after a downwardly revised 0.9 per cent fall in the March quarter.

The previous time GDP fell was in the December quarter of 2008, at the height of the global financial crisis.

Over the year to the end of June, GDP grew by 1.4 per cent, seasonally adjusted in chain volume terms, the Australian Bureau of Statistics (ABS) said on Wednesday.

Economists had been expecting GDP to rise by 1.1 per cent in the June quarter for an annual rate of 0.7 per cent, according to an AAP survey of 13 economists.

The large March quarter contraction meant there was a fall in GDP over the three quarters ending March, which is why growth over the year to June was forecast to be less than growth in the June quarter itself.

The seasonally adjusted GDP implicit price deflator, the broadest measure of price changes in the economy, was up 1.6 per cent in the June quarter, compared to a rise of 1.5 per cent in the March quarter, to be up 4.9 per cent over the year.

The seasonally adjusted implicit price deflator for household final consumption rose 0.4 per cent in the June quarter, from a rise of 1.2 per cent in the previous quarter, and was up 2.5 per cent over the year.

Farm GDP, in chain volume measures, rose 1.5 per cent in the June quarter to be up 14.3 per cent in the year to June.