Economic growth has failed to live up to expectations. Gross domestic product climbed just 0.4 per cent in the December quarter to give Australia annual growth of 2.3 per cent, much weaker than the 2.75 per cent expected by the Reserve Bank.
GDP per person scarcely moved, climbing 0.1 per cent in the quarter to be up 0.9 per cnet over the year. Prices were flat, suggesting zero inflation in the quarter.
Almost all the economic growth was concentrated in Australia’s three mining states. Over the past year demand has climbed 11 per cent in Western Australia, 10 per cent in Queensland, and 6 per cent in the Northern Territory.
In NSW it has climbed just 2 per cent, in Victoria 1.6 per cent and in the ACT 2.6 per cent.
In South Australia and Tasmania demand is shrinking, going backwards 0.6 per cent and 0.7 per cent.
The Australian dollar fell 0.4 of a US cent on the news, slipping from 105.72 to 105.30 US cents amid talk the Reserve Bank might now be more inclined to cut interest rates.
Just yesterday the Bank indicated it had no plans to cut interest rates in the absence of major bad news. It said economic growth was “close to trend overall”. The long term trend is above 3 per cent.
Today’s figures show the economy growing extremely fast in some states and painfully slow in others, failing to make trend overall.