Australia avoids recession with growth in December quarter

Data released by the national statistics bureau reported Wednesday that in annualized terms, GDP surged 2.4 percent, following a 1.8 percent year-over-year gain in the third quarter.

According to the NBS figures, the economy actually performed better overall past year as the growth rate was higher with a contraction at 1.5 per cent than the 1.8 per cent predicted by the International Monetary Fund (IMF), raising the hope that the recession may have bottomed out with the improving trends in several key sectors of the economy of agriculture and mining.

He said the outlook for 2016 is positive, and that the country is in the early stages of recovery.

That makes a mockery of assertions that the economy was heading for recession (after the September quarter's contraction) and claims as late as yesterday on ABC morning TV that the economy had not made the transition from the mining boom and remained too reliant on mining. A decline in real estate, manufacturing, construction and trade weighed most on the non-oil sector, according to the agency.

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The central bank has eased rates by 300 basis points since November 2011-including two cuts in 2016-to support growth in non-resources industries. This reduction, according to the NBS, is "largely been attributed to vandalism in the Niger Delta region".

"As a result, the sector contracted by -13.65 per cent; a more significant decline than that in 2015 of -5.45 per cent.

Public and private capital formation both contributed 0.3 percentage points this quarter after both detracted from GDP growth last quarte", the ABS pointed out.

The terms of trade spiked 9.1 percent on quarter and 15.6 percent on year.

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Annual growth was 2.4 per cent, smashing expectations.

The Reserve Bank of Australia (RBA) is counting on growth to pick up to around 3 per cent this year and next, thanks in part to surging exports of liquefied natural gas.

He said that the metal ores sub-sector grew by 7.03 per cent in the fourth quarter of 2016 as against 6.93 per cent in the last quarter of 2015.

"It is expected that if the current trend of improving indicators is sustained, the economy will come out of recession very soon, " James said.

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