Economic growth in resource-rich Australia may have cooled in the last quarter following a slump in commodity prices, Treasurer Wayne Swan said Sunday.
“We shouldn’t be surprised to see growth moderate from its above-trend pace in the first half of the year given the impact of difficult global conditions and the sharp decline in commodity prices that occurred in the quarter, plus the ongoing pressures on some sectors from the high dollar and cautious consumer behavior,” Mr. Swan said in his weekly economic commentary.
Prices of industrial commodities have fallen sharply from last year’s highs, with iron ore hit particularly hard as demand from China has softened in recent months.
Mr. Swan said that despite the challenges, Australia remained resilient.
“The pipeline of investment, along with our low unemployment, contained inflation and lower interest rates, provides a rock-solid foundation for our economy in the face of continuing global headwinds,” he said.
Total capital expenditure in the country is expected to rise to 173 billion Australian dollars ($180 billion) this financial year from A$155 billion in the year through June, figures released Thursday by the Australian Bureau of Statistics showed.
“It’s important to note this spending isn’t all confined to the mining industry. Other industries plan to invest some A$64 billion to build their businesses this year,” Mr. Swan said.
A report from the Bureau of Resources and Energy Economics on Wednesday said that the value of committed resource projects in the country now stands at a record A$268 billion.
Prime Minister Julia Gillard, in interview comments released by her office separately, said her government stood by forecasts that suggest it is on track to achieve a budget surplus next year.
Via – MarketWatch