The Australian economy may receive a boost to economic growth from higher than expected mining exports, according to a report by the Australian Bureau of Statistics (ABS). On Tuesday, the ABS released data showing a potential rise in gross domestic product (GDP) growth from exports. The previous headwinds facing the mining sector still exist. But balance payment figures showed a surprise surplus in goods and services, which rose to $1.80bn in the first three months of the year.
The ABS said the surplus would contribute up to 0.50 per cent GDP growth for the quarter. The market and many economists had projected mining exports to contribute 0.0 per cent to GDP growth. But the ABS has increased its figures and projections following the mining data. ANZ economist Felicity Emmett said the March quarter GDP forecasts have been revised upwards. ANZ now expects the Australian economy to grow at 0.90 per cent, up 50 per cent from the previous 0.60 projection. This would be the strongest growth on record since the first quarter of 2014.
The mining investment taper extend past the mining sector, with broad sectors of the economy looking “soft”, according to Ms. Emmett. But the resource sector has remained surprisingly versatile in the face of significant headwinds. “Strength in the economy continues to be concentrated in exports, particularly resource exports, and housing,” Ms. Emmett said. Other banking institutions also upgraded their GDP forecasts, including US-giant JP Morgan. Economist at the bank Tom Kennedy said the bank now expects Australian GDP to grow at 0.80 per cent rather than the previous projection of 0.50 per cent.
Author: Imran Valibhoy
Jun 02, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.