Australia Economy Grows More Than Forecast

Australia’s economy grew faster than estimated last quarter on consumer spending and mining-driven investment, spurring the local currency as investors pared bets on the pace of interest-rate cuts next year.

Gross domestic product rose 1 percent in the three months ended Sept. 30, after growing a revised 1.4 percent the prior quarter, the fastest pace in four years.

Currency Gains

The Australian dollar rose after the report, buying $1.0268 at 1:30 p.m. in Sydney from $1.0243.Compared with a year earlier, the economy expanded 2.5 percent in the third quarter.

China is Australia’s biggest trading partner and its demand for iron ore, coal and energy drove the nation’s terms of trade -- a measure of export prices relative to import prices .

Mining Boom

Mining increased 3.7 percent, adding 0.3 point. Private-sector business investment surged 12.9 percent from the prior quarter and 22.7 percent from a year earlier.

Government Spending
The report also showed government spending dropped 1.2 percent, subtracting 0.2 point from GDP growth. Imports rose 4.3 percent, subtracting 1 point.
The nation’s household savings ratio rose to 10.1 percent in the three months through September from 9.1 percent in the second quarter, today’s report showed.


Australia’s jobless rate fell to 5.2 percent in October as employment gained by 10,100 workers. Government data tomorrow may show unemployment stayed at that level in November, with the number of workers increasing by 10,000. (Bloomberg)