Australian hopes of a quick rebound from the global downturn
were dented on Wednesday when official figures showed the economy
had not grown as much as expected in the third quarter.
Data showed the economy, dubbed the "wonder from Down Under" as
it led advanced world in recovering from the slump, grew just 0.2
percent quarter on quarter, well down from the previous three
months when it expanded 0.6 percent.
Economists had expected an expansion of 0.4 percent. The
year-on-year growth figure was 0.5 percent, according to the
Australian Bureau of Statistics.
Treasurer Wayne Swan said the figures were "pretty stunning"
after the worst global slowdown in decades, but warned the recovery
was still relying on government stimulus.
"Conditions are improving but I think the accounts today provide
a cautionary reminder that there's some time to go before our
growth momentum becomes sustainable," he told reporters.
"What we're seeing is a growth figure which is quite remarkable
given the circumstances we were in a year ago," he added. "We've
put in the hard yards to do that but we understand there's much,
much more to do."
Australia was the only major Western economy to avoid a
recession in the global downturn -- thanks to strong resources
exports and huge emergency spending. And in October it became the
first to ease monetary stimulus.
Unemployment fell to 5.7 percent last month, reinforcing hopes
of a rapid recovery with both business and consumer confidence
buoyant, the stock market high and the Australian dollar
approaching parity with the greenback.
The commodities-based Aussie took a battering from Wednesday's
news, closing down 1.39 US cents at 89.87 US cents. Stocks dipped
0.25 percent, with the benchmark S&P/ASX 200 index shedding 11.6
points to close at 4,661.9.
Analysts said the sluggish new growth figure was a reminder that
the recovery might not be as straightforward as previously hoped.
"The critical point is we're not slipping back towards anything
representing recession," The Australian newspaper's business writer
Andrew Main told Sky News.
"It's a reminder that all graphs don't go in a straight line --
they go up, they go down. What we're looking at is a reminder that
the economic recovery in Australia is not going to be a
straight-line exercise."
Economists also said the figure made Australia's central bank
less likely to raise interest rates for the fourth time in a row in
its next announcement in February.
Reserve Bank of Australia deputy governor Ric Battellino said
rates, pulled off 50-year lows of 3.00 percent to 3.75 percent in
consecutive months, showed monetary police was back in "normal
range".
"It would be reasonable to conclude that the overall stance of
monetary policy is now back in the normal range, though in the
expansionary segment of that range," Battelino told a banking
conference.
were dented on Wednesday when official figures showed the economy
had not grown as much as expected in the third quarter.
Data showed the economy, dubbed the "wonder from Down Under" as
it led advanced world in recovering from the slump, grew just 0.2
percent quarter on quarter, well down from the previous three
months when it expanded 0.6 percent.
Economists had expected an expansion of 0.4 percent. The
year-on-year growth figure was 0.5 percent, according to the
Australian Bureau of Statistics.
Treasurer Wayne Swan said the figures were "pretty stunning"
after the worst global slowdown in decades, but warned the recovery
was still relying on government stimulus.
"Conditions are improving but I think the accounts today provide
a cautionary reminder that there's some time to go before our
growth momentum becomes sustainable," he told reporters.
"What we're seeing is a growth figure which is quite remarkable
given the circumstances we were in a year ago," he added. "We've
put in the hard yards to do that but we understand there's much,
much more to do."
Australia was the only major Western economy to avoid a
recession in the global downturn -- thanks to strong resources
exports and huge emergency spending. And in October it became the
first to ease monetary stimulus.
Unemployment fell to 5.7 percent last month, reinforcing hopes
of a rapid recovery with both business and consumer confidence
buoyant, the stock market high and the Australian dollar
approaching parity with the greenback.
The commodities-based Aussie took a battering from Wednesday's
news, closing down 1.39 US cents at 89.87 US cents. Stocks dipped
0.25 percent, with the benchmark S&P/ASX 200 index shedding 11.6
points to close at 4,661.9.
Analysts said the sluggish new growth figure was a reminder that
the recovery might not be as straightforward as previously hoped.
"The critical point is we're not slipping back towards anything
representing recession," The Australian newspaper's business writer
Andrew Main told Sky News.
"It's a reminder that all graphs don't go in a straight line --
they go up, they go down. What we're looking at is a reminder that
the economic recovery in Australia is not going to be a
straight-line exercise."
Economists also said the figure made Australia's central bank
less likely to raise interest rates for the fourth time in a row in
its next announcement in February.
Reserve Bank of Australia deputy governor Ric Battellino said
rates, pulled off 50-year lows of 3.00 percent to 3.75 percent in
consecutive months, showed monetary police was back in "normal
range".
"It would be reasonable to conclude that the overall stance of
monetary policy is now back in the normal range, though in the
expansionary segment of that range," Battelino told a banking
conference.