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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report