Economy grows at fastest pace in nearly two years

Submitted 4/03/2010

AAP

 

The economy grew at 0.9 per cent in the three months to the end of December, its fastest pace since the March quarter of 2007, quarterly national accounts released today showed. The Australian Bureau of Statistics (ABS) data showed gross domestic product (GDP) grew 2.7 per cent in the year to December, up smartly from the originally reported 0.6 per cent growth recorded in the 12 months to September. The quarterly increase was in line with economists' expectations, although the annual rate beat forecasts of 2.4 per cent growth due to revisions to previous quarters. The ABS said the main contributors to GDP growth in the quarter were business investment, government spending and household consumption. Imports were the biggest drag on growth. The big jump in the annual growth rate was the result of the large - and revised - 0.9 per cent contraction in GDP in the December quarter 2008 dropping out of the equation. The continued strengthening of the economy appeared to justify the Reserve Bank of Australia's (RBA) decision to lift the cash rate by a further 25 basis points to 4.0 per cent at Tuesday's monthly board meeting.