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Investing.com-- Australia’s economy grew more than expected in the fourth quarter, aided by robust public and private spending, along with a rebound in export demand.
Growth also improved amid some declines in inflation, as the effects of high interest rates were felt across the economy.
Gross domestic product rose 0.6% quarter-on-quarter, data from the Australian Bureau of Statistics showed on Wednesday. The print was higher than expectations of 0.5% and picked up from the 0.3% seen in the prior quarter.
GDP grew 1.3% year-on-year, above expectations of 1.2% and higher than the 0.8% seen in the prior quarter.
Growth was boosted chiefly by strong public and private investment, while Australia’s terms of trade also rebounded from a sharp decline in the prior quarter. Trade demand was driven chiefly by stronger services exports, while commodity exports remained under pressure from weak Chinese demand.
A strong Q4 GDP was widely expected, following a string of positive economic readings leading up to Wednesday’s data.
Strength in the economy gives the Reserve Bank of Australia more headroom to keep rates high, given that inflation still remained sticky in the fourth quarter.
But some cooling in inflation saw the RBA cut interest rates for the first time in nearly five years in February. The central bank said that risks of a global trade war and cooling local growth drove its recent cut.
The RBA warned that further easing still remained largely contingent on the path of inflation and the economy.