The Australian economy grew by 1.2 percent in the June quarter, with growth through the year to June at 3.3 percent in figures released today by the ABS, placing pressure on the RBA to increase interest rates before the end of the year.
In figures released yesterday by the ABS retail trade continued to improve in July, with ABS Retail Trade figures up 0.7 percent in July, seasonally adjusted compared to an increase of 0.4 percent in June. This increase in demand at the retail level in July hints at the possibility that the ABS’ GDP figures for the September quarter will show an increase in gross domestic product higher than those seen in the June quarter, with this increase in activity cycling through the Australian economy and putting pressure on inflation, the key determinate of the RBA’s interest rate policy.
In seasonally adjusted terms growth in the expenditure measure of GDP was driven by a 1.6 percent increase in household expenditure and an increase in exports of 5.6 percent or some $12,747m in additional exports seen in yesterday’s decrease in the trade deficit figures released by the ABS. Offsetting these increases was the change in inventories, which detracted 0.7 percentage points from GDP growth for the quarter.
The industries that provided the main contribution to growth in seasonally adjusted terms in the production measure of GDP in the June quarter were Construction with a 4.9 percent increase, Mining with a 1.5 percent increase and Professional, scientific & technical services with a 2.3 percent increase.
In seasonally adjusted terms Real gross domestic income increased by 4.0 percent, which is the largest quarterly growth in gross domestic income since March 1973. This increase in gross domestic income reflects an increase of 12.5 percent in the Terms of trade.