Australia’s economic growth slowed last quarter as the currency strengthened and commodity prices weakened, underscoring the central bank’s bias to keep interest rates at a record low to boost domestic demand.
Second-quarter gross domestic product advanced 0.5 percent from the previous three months, when it rose 1.1 percent, a Bureau of Statistics report released in Sydney today showed. The result compared with a median forecast for a 0.4 percent gain from a survey of 27 economists by Bloomberg News.
The data underscore a division in policy outlook between the Federal Reserve, which markets bet will tighten next year, and the Reserve Bank of Australia’s flagged period of stability for its record-low benchmark. Australia is losing its developed-world-beating status as the mining investment boom that powered it through the global financial crisis wanes, while the associated currency strength fails to dissipate.