Australian economy grew 3% in 2015, markets close up

Wednesday, 02. March 2016 07:42

The Australian stock market was boosted by some good news about the growth of the economy, as latest data from the government statistics revealed a significant development in 2015 despite difficult environment, particularly in Asia.

The S&P/ASX 200 index finished up 2.01% at 5,021 points, with energy, financial, materials and telecom sectors marking healthy gains.

The Australian dollar strengthened 1.04% against the Japanese yen, and 0.86% versus the U.S. greenback, rose 0.80% against the New Zealand counterpart and 0.91% compared to the euro, all by 7:41: a.m. CET.

Australian economy grew 0.6% in the fourth quarter of 2015, according to data from the Australian Bureau of Statistics (ABS) published on Wednesday.

On the other hand, real gross domestic income rose a modest 0.1%, while disposable income measure, which the ABS describes as "a broader measure of change in national economic wellbeing," fell 0.3% during the fourth quarter.

That means the Australian economy has expanded by 3% on the annual level, well above rate of 2.5% expected by the Reserve Bank of Australia. Strong consumer and government spending were pulling the entire economy, which is strongly dependent on commodities, from the claws of the global slump in mining.

The growth in expenditure reached 3.1%, with a rise of 0.8% in household consumption, which translated into a 2.7% growth in information, media and telecommunications services, and a rise of 1.0% in retail sales. Public gross fixed capital formation jumped 6.0%, while private investment fell by 3.3%, and there was a significant fall in engineering construction of 12.3%.

This conforms well with the decision of the Reserve Bank of Australia (RBA) "to leave the cash rate unchanged at 2.0 per cent."

"Recent information suggests that the global economy is continuing to grow, though at a slightly slower pace than earlier expected," said the RBA's governor Glenn Stevens on Tuesday, and added that "conditions have become more difficult for a number of emerging market economies."

Chief of RBA also mentioned China's moderate growth rate, and a substantial decline in commodity prices, partly reflecting slower growth in demand but also large increases in supply.

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Breaking the News / ZR