The Australian economy grew at its slowest rate since the midst of the global financial crisis, but economists expect growth to pick up over the coming months.
Gross domestic product expanded by just 0.2 per cent in the third quarter and would have contracted if not for a solid contribution from the farm sector. Annual growth was also lower than expected at 2.7 per cent after downward revisions to the past.
The median market forecast was for growth of 0.5 per cent in the quarter, and an expansion of 3.4 per cent in the year to the end of September.
Yet analysts remain optimistic that Australia is still on track for its 20th straight year without a recession as Chinese and Indian demand for resources fuels a boom in trade and mining investment that should keep growth brisk.
ICAP economist Adam Carr said while the headline GDP figure was weaker than expected, it was not surprising.
‘‘It’s nothing to worry about,’’ he said. ‘‘We’ve had very strong growth over the last year.
‘‘The market was talking about the possibility of getting a negative number so I don’t think it has any implications for (monetary) policy.’’
Mr Carr noted that household consumption and investment in non-residential dwellings were both strong.‘‘We’re just seeing a bit of volatility in some of the other components.’’
He said the Australian economy was not slowing due to higher interest rates.
ICAP chief economist Adam Carr agreed that the moderation wasn’t surprising.
‘‘We had four or five quarters of very strong growth,’’ he said. ‘‘Core domestic demand remains robust and growing at over 4 per cent annual pace, which on any measure is strong.
‘‘The immediate market relevance is low, the RBA is on hold until next year anyway.’’
St George Bank senior economist Kate King said leading indicators suggest growth will be stronger into the new year.
"We think today's number is a blip,’’ she said. "I don't think the RBA will take much notice of today's number. In November they made it clear it was pre-emptive. They are also expecting growth to surge into the new year.’’
AAP, Reuters