Recession: Economy Shows Signs Of Recovery - NBS
- Author: Megan Austin Mar 03, 2017,
Mar 03, 2017, 0:49
"The report shows GDP contracted by -1.30 per cent in the quarter which translates to an estimated growth rate of -1.51 per cent for the full year 2016".
The ABS said this decline was driven by weak growth in household Gross disposable income of 0.2% while household spending lifted to 1.2% from subdued growth of 0.6% in the previous quarter.
The Australian dollar jumped to 76.87 U.S. cents from 76.45 U.S. cents prior to the numbers being released.
"The surge in February builds on a recovery from the sluggish performance in the third quarter of past year and marks a fifth month of expansion", said Australian Industry Group chief executive Innes Willox.
A repeat of the third quarter GDP contraction would have sunk Australia into its first recession in 25 years.
Real agricultural GDP growth in the fourth quarter of 2016 was 4.03 per cent (year-on-year), representing an increase of 0.56 per cent from 3.48 per cent recorded in the same quarter in 2015.
Households expenditure contributed 0.5 points to the result, and net exports contributed 0.2 points.
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Also helping was the surge in commodity prices in the last half of the year and the surge in our trade deficit and fall in the current account deficit, the surge in company profits, especially those from the mining sector.
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.
Australia's terms of trade, a measure of the relative value of exports and imports, improved 9.1 per cent in the fourth quarter. Mining, agriculture, forestry and fishing and professional scientific and technical services contributed heavily to the GDP growth.
"The outlook for the next year is reasonably bright", Shane Oliver of AMP Capital said.
Economists had expected this performance to be repeated, and then some, the following month, typically predicting a surplus of $3.8 billion, with one analysts predicting a $5 billion positive trade balance.
Also, Senior Special Assistant on Media and Publicity to the Vice President, Laolu Akande, said the Federal Government is determined to bring about the full recovery of the economy and set it on a solid path of sustainable growth.