Sharechat Logo

Australia's economy expands at slowest pace in 8 years

Wednesday 3rd December 2008

Text too small?
Australia's economy grew at the slowest quarterly pace in eight years as household spending weakened.

Gross domestic product expanded 0.1% in the third quarter for an annual increase of 1.9%, according to the Australian Bureau of Statistics. That lagged behind the 0.2% median estimate in a Reuters survey.

"A crisis of confidence on the consumer front was a key factor in Q3," economists at Westpac said. "Australians were rattled as they saw wealth decline, with house prices falling gradually and the share market dropping sharply."

Slowing growth raises the prospect that the Australian economy will slide into recession as corporate earnings flag and stocks tumble. Reserve Bank Governor Glenn Stevens has cut the benchmark interest rate by 300 basis points to since early September. The GDP report may add to pressure on the bank for further cuts, economists said.

"It was a quarter in which monetary policy was very tight, the credit crisis was biting and the global economy was slowing significantly," Westpac said.

Household savings rose by A$4.9 billion in the latest quarter, helped by the impact of tax cuts, which consumers opted not to spend.

Stevens cut the benchmark rate to 4.25% yesterday, citing a "significant moderation in demand and activity" in developed economies.

By Jonathan Underhill



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

AIA - June 2025 Monthly traffic update
CHI - Q2 2025 Operational Update
July 15th Morning Report
BPG - Blackpearl Acquires US AI Platform to Accelerate Growth
TGG - Response to media speculation
ARB - Annual Meeting Date and Director Nominations
CNU - Q4 FY25 Connections Update
MOVE FY25 Results and Investor Briefing 29 August 2025
RYM - First quarter trading update
July 11th Morning Report