The Australian economy has posted its second consecutive quarter of robust growth as the booming mining sector fuels a solid rise in business investment, official figures show.
Gross domestic product (GDP) rose by 1.0 per cent in the September quarter, after an upwardly revised 1.4 per cent rise in the June quarter, the Australian Bureau of Statistics (ABS) said on Wednesday.
HSBC chief economist Paul Bloxham said the data indicated a generally positive economic trend based on mining investment.
"I think these figures show that the Australian economy is still in pretty good shape, and that's reflected in the fact that we've got strong GDP growth in the third quarter," he said.
Over the year to September, GDP grew by 2.5 per cent, IN seasonally adjusted and inflation-adjusted terms.
Mr Bloxham said the Australian economy was good shape ahead of a possible recession in Europe.
"We expect that the mining investment boom will continue to support solid growth, but the concern is that offshore risks have grown substantially."
Mr Bloxham said he expected further interest rate cuts in the new year following on from the two consecutive monthly cuts by the Reserve Bank of Australia (RBA) after its November and December board meetings.
"We expect that offshore risks will prevail early in the next year, and they will have to cut rates again," Mr Bloxham said.
"Ongoing domestic momentum will help protect Australia from offshore risks, as will loosened monetary policy."
Citigroup head of economics Paul Brennan said h expected economic growth to slow in the December quarter
"Further acceleration from the third quarter growth rate is highly unlikely, with some slowing in our major trading partners and moderation in some leading indicators," he said.
"In addition, there are some downside growth risks from the European sovereign debt crisis.
"But a strong base of activity at the time of renewed global concerns, in combination with some relief to the non-mining sector from interest rate cuts, places Australia in an enviable position to deal with these risks."
Mr Brennan said he expected the RBA board to cut the cash rate again at its next scheduled meeting in February, taking the rate down to four per cent.
Commonwealth Bank economist James McIntyre said the outlook for the Australian economy in 2012 looked solid, especially after the consecutive rates cuts by the central bank.
"Those two rates should begin to at least start to take away some of the negative from the non-mining side of the economy, particularly on that confidence front," he said.
"It should, along with that mining sector upswing, be something that supports the economy in the new year.
"It should, along with that mining sector upswing, be something that supports the economy in the new year. But at the same time the expectation is that the terms of trade is likely to have peaked at this point."
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