Australia Economy ‘On Fire’ As Growth Remains Strong

The Australian economy enjoyed better than expected growth over the second quarter, as a consequence of increased private investment, according to figures released today.

In the face of worldwide economic gloom off the back of the US sub-prime lending crisis, the Australian economy has been performing very well over the last year, beating analyst expectations across a wide range of economic indicators.

Despite widespread analysts forecasts, the economy grew by 0.9% over the last quarter - 0.3% points above general opinion. At present rate, the Australian economy has been revised to a growth rate of 4.3% - the fastest rate of growth since 2004.

Investment in mining and extraction sectors, spurred by increasing demand from emerging markets in China and India were thought to be strong factors in the higher than predicted growth, leading many analysts to describe the economy as being ‘on fire’. Exports had significantly increased over the period, remaining strong with neighbouring nations, whilst corporate investment was up, as a natural stimulant to economic growth.

With the country suffering from some of the worst drought in history, and agricultural yields strongly down on the season as a result of wider weather extremes, analysts had been fearing that growth would be significantly hindered over the period, hence the smaller growth forecast.

Whilst there had been some speculation that the Australian central bank would raise interest rates in line with wider major economic movements, the volatility in the stock markets and the impending global credit crunch have made that, for the time being at least, unlikely.

As a result, analysts are maintaining that the economy could continue to experience a similar level of growth for the remainder of the year, provided the wider worldwide problems don’t have too much of an effect on the internal economy.

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