Aussie economy beats expectations in Q2
The Australian economy grew by 1.2 per cent in the second quarter of 201 - above the consensus forecast of 1 per cent, according to an economic update from Colonial First State Global Asset Management (CFSGAM).
The higher than expected growth comes after lacklustre growth of 0.9 per cent in the first quarter of 2011, which was revised down from 1.2 per cent after the effects of the natural disasters in Queensland were factored in.
CFSGAM put the rebound in the second quarter partly down to a 1 per cent increase in household final consumption spending and a 1.3 per cent rise in private sector capital spending.
The household savings rate fell to 10.5 per cent in the second quarter of 2011, which was still a high savings rate and indicative of a cautious attitude among consumers, according to CFSGAM. By comparison, the savings rate in the first quarter of 2011 was 11.7 per cent - although CFSGAM said that this figure was impacted by people saving the Government's flood-relief stimulus.
Australia's terms of trade rose to a record high of 5.4 per cent in the second quarter of 2011, which CFSGAM said would underpin the Australian economy's growth in the future.
"This gain in the terms of trade will provide further income flow into the economy in the quarters ahead, and will continue to be a strong support for the economy," the report said.
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