Australia’s economy takes gigantic leap forward

The Australian economy grew at its
fastest pace in three years in the second quarter of the year.

The growth was fuelled by demand
for the country’s iron ore and other commodities, mainly from China.

The figures show gross domestic
product (GDP) expanded 1.2 per cent in the April-June quarter from the previous
quarter, compared with 0.7 per cent in the first quarter.

Australia has gone for 19 years
without suffering a recession.

It was hit by the recent global
downturn, but less hard than most other developed countries.

Australia came through the crisis
better than most other developed countries, although it still needed a stimulus
package of $38 billion.

Economists hailed the GDP figure.

“It’s a fantastic result – the
economy is as strong as an ox,” said Brian Redican, a senior economist at
Macquarie. “It was also well balanced, with household consumption much
stronger than anyone thought.”

He added that the figure meant
there was now very little chance of a cut in interest rates.

Investors had thought there might
be cut in interest rates at some point in the near future, as inflation had
been cooling.

Rates have been on hold at 4.5 per
cent since May.