Data released by the Australian Bureau of Statistics (ABS) on Wednesday showed that GDP grew faster than expected. During the March quarter of 2015 the Australian gross domestic product (GDP) grew at 0.90 per cent. Over the 12 months to March, seasonally adjusted GDP grew by 2.30 per cent. Both quarterly and annual GDP grew faster than what was projected. The ABS cited a surprising uptick in mining exports as the cause for the better than expected results.
Earlier in the week, economist had raised projections after mining export data came in better than expected. A survey by Bloomberg pegged March quarter GDP growth at 0.70 per cent. Analysts at both JP Morgan and Deutsche Bank had projected growth to be at 0.80 per cent for the period. Before mining data came into play, growth projections were even lower. The ABS revised their own projections and estimated that the surplus in mining exports would contribute 0.50 per cent to the GDP growth rate in the March quarter.
Despite the better than expected figures, the Australian economy is still facing headwinds. The seasonally adjusted annual growth of 2.30 per cent is still below the 3.25 per cent long-term growth trend. It was also lower than the seasonally adjusted figures for the year through the December quarter, which came to 2.50 per cent. Unemployment has been cited as a key factor for lower growth figures. The Australian dollar jumped sharply on the data, but has since tapered off slightly. The AUD is sitting at US$0.7794 around 1:12pm on Wednesday.
Author: Simon Herrmann
Jun 03, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.