SYDNEY, Australia (AFP) — Australia marked a world-record 26 years without a recession Wednesday, as the economy grew 0.3 percent in the first-quarter, official data showed.
The Australian Bureau of Statistics put the annual rate of growth at 1.7 percent, down from 2.4 percent in the previous three months.
The soft quarterly reading was widely expected by analysts amid the impact of category four Cyclone Debbie on eastern Australia in late March, weaker trade figures and tepid wages growth.
“The results today demonstrate the continued resilience of the Australian economy,” Treasurer Scott Morrison told reporters.
The Australian dollar rallied by a quarter of a US cent to 75.27 cents just after the data was released, as some analysts had predicted a negative first-quarter reading.
Australia last recorded two negative quarters of economic growth in March and June 1991, before enjoying 103 quarters without a recession to equal the record set by the Netherlands.
Economists said the resources-rich nation’s long stretch of expansion was supported by economic reforms in the 1980s and 1990s, such as the floating of the local currency, a flexible labour market, financial sector and capital markets deregulation and lower tariffs.
Australia has also benefited from China’s economic growth and hunger for natural resources, which led to an unprecedented mining investment boom and record commodity prices.
But economists have warned that economic growth in the next few years may not be as rosy.
“In the context of the past few years, it is still a fairly weak outcome,” JP Morgan economist Tom Kennedy told AFP of the latest figures.
“The real issue is that consumption is still pretty soft even though the saving rate fell… and (capital expenditure) was flat, still not doing anything.
“That’s really important for the Australian economy so the domestic drivers of growth in Australia are still pretty underwhelming.”
Australia is making a rocky transition away from a dependence on mining investment as the boom ends, with the central bank cutting interest rates to a record-low of 1.50 percent to support growth in non-resources sectors.
© Agence France-Presse
