Australia’s economy grew more than forecast in the first three months of the year, boosted by a rise in exports and domestic consumption.
Growth was 1.1% in the January-to-March period, from the previous quarter. Most analysts had forecast growth of 0.9%.
The annual growth rate was 3.5% – the highest in nearly two years.
However, some analysts said the figures indicated that Australia’s economy was still too heavily reliant on the mining sector – which has been a concern.
Mining accounted for around 80% of growth in the quarter, according to the figures by the Australian Bureau of Statistics.
“The bulk of this better-than-expected growth has come from net trade – with very strong exports over the quarter and that maps back to the resource sector with very strong shipments of iron ore and coal,” said Tom Kennedy, an economist with JP Morgan.
“When you look at growth generated domestically, that actually contracted in the first quarter.
“And that of course sits with the theme that we have seen over the past few months of a pretty soft labour market, and a lot of consumer caution as well as a central bank that’s keeping things pretty accommodating at the moment,” he added.
On Tuesday, the Reserve Bank of Australia left its interest rate unchanged at a record low of 2.5%.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.