Growth in Australia's GDP slows to 0.5pc
Unpopular budget of spending cuts and higher charges saps consumer sentiment
Australia's economy slowed in the year's second quarter as cautious consumers curbed spending and the country imported more, though the result was better than many had feared - and still ahead of most of its rich-world peers.
Data showed yesterday that gross domestic product (GDP) rose 0.5 per cent from the first quarter, when it expanded by a surprisingly strong 1.1 per cent.
In some ways, the slowdown was self-inflicted, as heavily criticised government efforts to justify an unpopular budget of spending cuts and higher charges further sapped consumer sentiment and spending.
Household consumption increased by a pedestrian 0.5 per cent, while Australians chose to save a precautionary 9.4 per cent of their disposable income.
Yet growth still topped forecasts of a 0.4 per cent rise, leaving the Australian dollar steady at US$0.9275.
"When we average out the first-half GDP, growth was tracking along at 3 per cent per annum, and that looks good when you benchmark it against all the negatives that were at work through the period," said Michael Blythe, chief economist with the Commonwealth Bank of Australia.