Australia’s Q2 GDP growth exceeds expectations

The Australian Bureau of Statistics (ABS) reported on Wednesday that Australia’s real gross domestic product (GDP) rose by 0.7 percent q-o-q (in seasonally adjusted terms) in the second quarter of 2021, exceeding economists’ forecast for a 0.5 percent q-o-q advance. That represented the weakest pace of growth in four quarters. In the first quarter, the GDP recorded a 1.9 percent q-o-q expansion (revised from the originally reported increase of 1.8 percent q-o-q).

According to the ABS, the domestic economy drove growth in the last quarter, contributing 1.6 percentage points to the rise in GDP. Both private and public demand increased, led by household spending (+1.1 percent q-o-q) and public investment (+7.4 percent q-o-q). Meanwhile, net external demand contributed negatively to the GDP, due to declines in exports of mining commodities reflecting disruptions to both coal production and transportation of iron ore to ports. Net exports Net trade detracted 1.0 percentage point from GDP growth in the second quarter.

In y-o-y terms, the GDP grew 9.6 percent after an unrevised 1.1 percent y-o-y gain in the prior quarter. Economists had forecast a 9.2 percent y-o-y rise for the last quarter. That was the strongest annual expansion rate on record.