Economy still growing strong, economists

31 Aug 2012, 3:33 pm   -   Source: AAP
(AAP)

(AAP)

Economists expect Wednesday's GDP data to show that Australia's economy remains strong, despite recent speculation the mining boom is over.

The mining sector may have lost some of its sparkle, but Australia's economy is still the envy of the developed world.

Economists expect official national accounts data released next week to show another three months of solid economic growth in the June quarter.

AAP's survey of 15 economists revealed a median forecast for GDP (gross domestic product, a measure of the size of the national economy) to have grown by 0.8 per cent in the quarter.

When coupled with the previous three quarters, including a massive 1.4 per cent jump in the first three months of 2012, that would mean the Australian economy grew by 3.8 per cent in the past 12 months.

By comparison, the United States economy has grown by 2.2 per cent over the same period, while the combined GDP of the European Union's 27 member states shrank by 0.2 per cent.

TD Securities head of Asia Pacific Research Annette Beacher said, despite talk in recent weeks that Australia's mining boom was waning, next week's GDP data would show the economy remained strong.

"There's some pretty sour people in the markets at the moment, they are looking at China not growing at 12 (per cent) and the iron ore price not at $140 and have declared the world is over," she said.

"(But) we're looking at about four per cent GDP growth and I dare any other OECD country to take us on," she said.

However, AMP chief economist Dr Shane Oliver said, while he was expecting the June quarter data to be fairly strong, GDP growth was likely to slow over the next 12 months.

"Growth (in the second quarter) is going to be weaker than the previous quarter but its still going to be quite reasonable," he said.

"But I think we will fall back to annual growth of around three per cent, perhaps two and a half per cent, as we go through next year."

The Australian Bureau of Statistics will release the quarterly national accounts data on Wednesday.

A 3.4 per cent rise in private sector capital expenditure investment during the quarter as well as a spike in exports are expected to be the strongest contributors to GDP growth over the period.

Economists also say a surprising jump in retail sales - which rose one per cent in the month of June alone - will provide a boost for the GDP numbers.

However, weakness in the housing sector, and a 0.2 per cent contraction in construction activity are expected to partially offset the strength of other sectors.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube