Australian Public Spending Lifts 2012 Economic Growth

Marcus Jacob
06 Mar, 2013
New York City

Australian GDP expanded at 0.6% in the December quarter and gained 3% in 2012, the fastest annual growth since 2007. However, the economic growth was uneven and growth drivers were softer than expected.

[R]6:30 PM Sydney – Australian GDP expanded at 0.6% in the December quarter and gained 3% in 2012, the fastest annual growth since 2007. However, the economic growth was uneven and growth drivers were softer than expected.[/R]

Australian economy expanded at 0.6% rate in final quarter to December and for 2012 grew 3% meeting the expectations set by most economists.

The data released by the Australian Bureau of Statistics indicated that the government spending increased 1.1% and net contribution from exports was 0.6% in the final quarter.

Even though the economic growth in the aggregate showed a healthy increase the economy needs rebalancing and several growth drivers were softer than expected.

Private investments fell 1% and inventories declined 0.4%. Mining, manufacturing, financial services and healthcare services each added 0.1 percentage point to the overall growth.

Australia’s two-speed economy was in full display after NSW region’s economy expanded at 0.4% for the quarter and 2.4% and Western Australia grew 0.5% in the quarter and 14.2% in the year.

Victoria’s economy expanded at 1.1% in the December quarter and contracted 0.1% in 2012.

The ASX 200 index jumped 41.40 or 0.8% to 5,116.80 and the broader All Ordinaries increased 42.74 or 0.8% to 5,130.89.

The Australian dollar declined to $1.027 after the release of the GDP report.

Stock Movers

Rio Tinto slumped 40 cents to $63.20 and BHP gained 42 cents to $35.82. Fortescue Metals Group jumped 16 cents to $4.50.

Woodside Petroleum increased 52 cents to $37.15 and Santos gained 18 cents to $13.29.

Newcrest Mining slumped 30 cents to $21.63. Kingsgate dropped 12 cents to $3.54 and Whitehaven Coal jumped 9 cents to $2.63.

David Jones Limited rose 2 cents to $2.99 and Breville Group lowered 7 cents to $5.46. Billabong up 0.5 cents to 87.5 cents and Globe International rose 1 cent to 41 cents.

Woolworths rose 4 cents to $35.19. Kathmandu climbed 7 cents to $2.

Toll Holdings rose 11 cents to $6.09, Leighton up 15 cents to $22.56 and Mirvac Group closed unchanged at $1.64. Lend Lease rose 4 cents to $10.46.

Westpac climbed 1.3% to $31.66, Commonwealth up 0.9% to $69.31 and National Australia Bank gained 0.8% to $30.83 and ANZ increased 1.2% to $29.23.

Macquarie Group jumped 51 cents to $38.08.

Woolworths edged up 0.1% to $35.19 and Wesfarmers slipped 9 cents to $42.11.