Australian Economy Grows In Third Quarter, But Concerns Of Financial Trouble Still Loom

 @TreyeGreen t.green@ibtimes.com
on March 04 2014 10:39 PM
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Sydney's central business district with its lights on is seen from east Sydney. Reuters

Australia’s final quarter of 2013 was marked by stronger-than-predicted growth.

According to official figures, gross domestic product (GDP) has increased 0.8 percent since the end of December. A growth of 0.7 percent was predicted during the previous quarter.

The country’s central bank announced on Tuesday it would keep interest rates steady at 2.5 percent. The Reserve Bank of Australia (RBA) has held rates at this amount for the past seven months, Reuters reports.

During the same quarter, the country’s account deficit decreased by 19 percent, said trade figures from the Australian Bureau of Statistics. ABS figures also suggest that growth was spurred more by exports and domestic consumption than by mining, with exports of goods and services rising by 3 percent during the period.

Still, despite the positive numbers regarding Australia's economy, RBA Gov. Glenn Stevens remains concerned that spending in the resources sector may experience large declines.

"Recent information suggests slightly firmer consumer demand and foreshadows a solid expansion in housing construction," said Stevens in a statement following the bank's monthly meeting.

"Some indicators of business conditions and confidence have shown improvement and exports are rising. At the same time, resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative," Stevens added.

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