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The Australian economy continues to go from strength to strength, supported by strong employment and GDP figures, writes Jessica Darnbrough
THE RAFT of economic data released over the past few weeks confirms the view that Australia remains one of the strongest developed countries in the world - a view that was bolstered by the latest Gross Domestic Product (GDP) figures.
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According to the Australian Bureau of Statistics (ABS), GDP grew 1.2 per cent over the June quarter following an upwardly revised 0.7 per cent increase in the previous quarter.
The results were labelled "outstanding" by the federal government.
Much of this increase can be attributed to the mining sector, whose pre-tax profits rose by 86 per cent in the June quarter to be only just below their pre-crisis peak in the September quarter of 2008.
Results such as these confirm that the mining boom is back.
Renewed strength in the resource sector is also improving Australia's balance of payments position, with the June quarter recording the country's largest trade surplus and smallest account deficit since 2001.
In addition, consumer spending jumped by 1.6 per cent in real terms over the June quarter.
Shoppers splurged more than $20 billion in July - 0.7 per cent more than in June, according to the ABS official figures.
Other ABS figures out this month showed slow but steady growth in building approvals and house prices.
Building approvals rose 2.3 per cent in July - the first increase in four months.
Similarly, house prices grew 3.1 per cent over the June quarter - the fifth consecutive increase. Sydney and Melbourne were the largest contributors to the quarterly increase, with median house prices climbing by 4.9 per cent and 3.6 per cent in the respective states.
In addition to climbing house prices, mortgage sales also managed to climb 10.9 per cent higher in August.
This spate of positive data is reasonably consistent with the RBA's view that the Australian economy has been growing at "around trend pace".
Hence, it was no surprise that, having previously raised the cash rate enough to push household interest rates back to average levels, the RBA decided to leave the monetary policy setting unchanged for now, though it's questionable how long it will last.
Moving forward, the RBA will be forced to weigh the uncertainty plaguing foreign countries against Australia's positive outlook. The indications are that a rate rise can be expected before the year is out.
