Provisional estimates indicate that the Gross Domestic Product (GDP) for the second quarter of 2016 amounted to €2,277.6 million, an increase of €102.7 million when compared to the corresponding period previous year.
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Year-on-year, Australia’s GDP increased by 3.3% in the three months to June, compared to expectations for a 3.4% rise.
National Australia Bank economists said in a note that Wednesday’s data “continues to suggest reasonable growth across the non-mining economy, despite some modest loss of momentum”.
“Economic growth is above long-term averages”.
Given an expected environment of labour shedding and weak consumer confidence, we expect an increasingly cautious Household, which will be focused on lowering its Debt-to-Disposable Income Ratio further, as well as lifting the savings rate noticeably.
The government’s economic cluster said that it was cautiously optimistic that the return to growth in the manufacturing and mining sectors could be sustained in the next few quarters.
Another indicator that manufacturing output may slow in coming months is the Barclays purchasing managers’ index, which fell sharply to 46.3 in the month of August.
The National Bureau of Statistics, who made this known in its quarterly report released, Monday, noted that the sector improved upon its 7.8 percent performance in the last quarter.
The worst performing sectors were Electricity, Gas and Water, with a -1.8% contraction, and Agriculture with a -0.8% contraction. As a result, the March quarter current account deficit was revised down to $14.8 billion by the Australian Bureau of Statistics from the previously reported $20.8 billion. The RBA second last monetary policy meeting for 2016 is scheduled for November 2.
The better long term news – in a quarter which marked 25 years of continuous annual growth in the economy – was on the income side of the accounts. It now sees zero growth for the local economy in 2016.
On mobile subscription, the NBS said that at the end of the second quarter of 2016 there were 454,092 CDMA subscribers, which represents a decline of 61.19 percent relative to the end of the previous quarter adding that this is the second consecutive sharp decline in CDMA subscriber numbers while in March there was a drop of 45.55 percent from 2,148,727 in December 2015 to 1,170,031. Spending on GDP grew 3.4% in the second quarter, data showed.
“The irony shouldn’t be lost on a government which rails against government spending yet is now relying on a surge in public expenditure to support their so called “jobs and growth” narrative”, he said”.
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A bumper quarter-on-quarter 1.0 percent expansion in the January-March period was driven by trade and household spending, but falling exports – a key growth engine – were a drag for the April-June number.
