AUS
NZ
UK
CA
USA
IND
Highlights
- The GDP for the June quarter has grown 0.7%, 30 bps over expectations,
- Consumption drove Australia’s growth story.
- Terms of trade were at record high level.
Beating the market expectations, the Australian economy grew by 0.7% in the June quarter on a sequential basis, according to the data published by Australian Bureau of Statistics (ABS).
The economists were discounting for a 0.4% sequential growth in the gross domestic product.
Despite beating the market expectations, the growth in the economy slowed down for the fourth consecutive quarter now. Last quarter, the Gross Domestic Product (GDP) had grown by 1.9%.
On an annual basis, GDP grew 9.6%, soaring from 1.1% in the previous quarter, while forecasters had been expecting an increase of 9.1%.
"Domestic demand drove growth of 0.7% this quarter which saw continued growth across household spending, private investment and public sector expenditure. Lockdowns had minimal impact on domestic demand, with fewer lockdown days and the prolonged stay at home orders in NSW only commencing later in the quarter," Head of National Accounts at the ABS, Michael Smedes said.
According to the ABS, the domestic economy drove the Australian growth engine, contributing 1.6% to the rise in GDP numbers. Demand from both private and public sectors increased: household spending was up 1.1% and public investment was up 7.4%.
The strengthening terms of trade contributed to a 3.2% increase in nominal GDP.
The terms of trade rose 7% this quarter to its highest level in history. The quarterly rise in the terms of trade was driven by strong export prices for mining commodities.
With the rise in the spending, household saving in the country declined. The household saving to income ratio declined from 11.6% to 9.7%.
After the announcement of the macro numbers, the markets witnessed buying as ASX200 pared almost half of its morning losses. At the time of filing this copy, the benchmark was down 0.51% -- from 1% fall in the early morning trade.
