RTTNews - Australia averted a technical recession as gross domestic product unexpectedly rose a seasonally adjusted 0.4 percent in the first quarter of 2009 compared to the previous quarter, the Australian Bureau of Statistics said on Wednesday.
That was significantly higher than the 0.2 percent quarterly contraction that analysts had been expecting after the revised 0.6 percent decline in the previous three months. Q4 2009 had originally been reported lower by 0.5 percent.
Non-farm GDP was up 0.5 percent, while terms of trade fell 7.8 percent and real gross domestic income fell 1.4 percent.
On an annual basis, GDP was also up 0.4 percent versus expectations for a 0.4 percent contraction after the 0.3 percent increase three months earlier.
In seasonally adjusted terms, the main positive contributors to expenditure on GDP were imports (1.6 percentage points), exports (0.6 percentage points) and household final consumption expenditure (0.3 percentage points). The largest negative contribution came from private business investment (-1.1 percentage points).
In seasonally adjusted terms, manufacturing and property and business services both detracted 0.3 percentage points from GDP growth, while construction detracted 0.2 percentage points.
Commenting on the data, Australia Treasury Secretary Ken Henry said that the data were boosted by solid gains among both net exports and household consumption.
Today's national accounts data shows a fairly large contribution to growth from net exports...in the March quarter, and that follows a substantial contribution to growth from net exports in the December quarter, Henry told the parliament in Canberra. We've got two quarters now of strong contribution from net exports and of course the other strong contributor in this quarter is household consumption.
The Australian dollar advanced further against the euro and the US dollar following the release of the GDP data. At 9:40 pm ET, the Aussie jumped to new multi-month highs of 1.7349 against the euro and 0.8183 against the US dollar. The Aussie that closed Tuesday's North American deals at 1.743 against the euro and 0.8211 versus the buck is currently quoted at 1.738 and 0.8821, respectively.
The data comes one day after the Reserve Bank of Australia decided to leave its key interest rate unchanged as expected, keeping the cash rate at 3 percent. The central bank has slashed the cash rate by 125 basis points since December 2008 and the official cash rate now stands at its lowest level in 49 years.
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