- POSTED: 03 Sep 2014 09:43
- UPDATED: 03 Sep 2014 20:30
Australia's economy lost pace in the second quarter of 2014 after a sharp fall in exports saw growth expand by just 0.5 per cent following a strong start to the year, data showed on Wednesday (Sep 3).
SYDNEY: Australia's economy lost pace in the second quarter of 2014 after a sharp fall in exports saw growth expand by just 0.5 per cent following a strong start to the year, data showed on Wednesday (Sep 3).
Annual growth was 3.1 per cent, figures from the Australian Bureau of Statistics said, compared to a year-on-year expansion of 3.5 per cent in the first quarter. Growth had soared to 1.1 per cent in the three months to March. Analysts had expected a slightly softer reading of 0.4 per cent for the second quarter to take growth for the year-to-date to 3.0 per cent.
The Australian dollar broadly looked through the data, remaining below 93 US cents despite edging up slightly. The slower growth rate was mostly driven by a fall in net exports, which declined by a seasonally adjusted 0.9 percentage points in the three months to June. Inventories supported growth in the quarter, adding 0.9 percentage points, while final consumption contributed 0.3 percentage points.
The softer figures had been flagged by the Reserve Bank of Australia, which on Tuesday decided to keep the cash rate on hold at a record low of 2.5 percent for its 12th-straight meeting. The central bank has sought to maintain an accommodative monetary policy as the country moves away from a mining investment boom that has helped the economy avoid recession for more than two decades