Australia's economy lost pace in the second quarter of 2014 after a sharp fall in exports saw growth expand by just 0.5 percent following a strong start to the year, data showed Wednesday. Annual growth was 3.1 percent, figures from the Australian Bureau of Statistics said, compared with a year-on-year expansion of 3.5 percent in the first-quarter. Growth came in at to 1.1 percent in the three months to March.
Analysts had expected a slightly softer reading of 0.4 percent for the second-quarter to take growth for the year-to-date to 3.0 percent. "Overall, these are pleasing figures but we are not complacent," Treasurer Joe Hockey said. "The unemployment rate is still too high. We've got to get economic growth above trend in order to start to bring the unemployment rate down."
Reserve Bank of Australia governor Glenn Stevens said in a speech following the data release that the first and second-quarter readings together "suggest a picture of moderate growth". He said more recent figures showed business conditions improving "a little" and consumer confidence recovering "a fair bit". The slower growth rate was mostly driven by a fall in net exports, which declined by a seasonally adjusted 0.9 percentage points in the three months to June.
Inventories supported growth in the quarter, adding 0.9 percentage points, while final consumption contributed 0.3 percentage points. The weaker figures had been flagged by the Reserve Bank, which on Tuesday kept interest rates at a record low of 2.5 percent for its 12th straight meeting.