Govt spending rose 0.8% in March quarter

Public sector spending rose 0.8 per cent in the three months to March and will boost GDP growth in the quarter by 0.2 percentage points.

Public sector spending added to economic growth in the March quarter.

Government final consumption spending, which is mainly the cost of delivering services, was up by a 0.9 per cent after adjusting for price changes and regular seasonal variations, while public sector investment was up by 0.7 per cent, the Australian Bureau of Statistics said on Tuesday.

The total of these two components of spending was up by 0.8 per cent.

Public sector spending is a little over a fifth of gross domestic product, so the 0.8 per cent rise will add about 0.2 percentage points to GDP growth in the quarter.

Also on Tuesday, the ABS said rising exports and falling imports would add 1.1 percentage points to growth for the quarter.

The foreign exchange market responded to the news of unexpected strength in the economy by pushing the Australian dollar up from around 71.9 US cents to over 72.3 within 10 minutes of the release of the data.