Australia's GDP suffers biggest quarterly fall since 1991

13:59, June 01, 2011      

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Australian economy suffered its biggest quarterly contraction since the recession of the early 1990s, largely due to natural disasters that has disrupted exports, figures for the March quarter showed on Wednesday.

The Australian Bureau of Statistics (ABS) on Wednesday released the figures showing that national gross domestic product (GDP) fell a steep 1.2 percent in the March quarter, largely as a result of the flood impact on Queensland coal exports.

The last time GDP contraction was in the December quarter of 2008, at the height of the global financial crisis.

It is the worst result since the March quarter of 1991, when the economy shrank 1.3 percent.

The retreat, caused by floods in Queensland and cyclones that hurt exports in key industries such as coal mining, has slowed the annual growth to just 1.0 percent, compared to 2.7 percent in the previous year.

ABS said flooding over summer had a significant impact on the result, and it is reflected in a 6.1 percent fall in the mining sector, which was the biggest industry detractor from the economy in the March quarter, taking 0.6 percentage points off economic growth.

Manufacturing fell 2.4 percent and Agriculture was down 8.9 percent, both of which detracted 0.2 percentage points from GDP.

"Flooding which began in late December 2010 combined with cyclones in both Queensland and Western Australian have had a significant impact on the March quarter activity," the Australian Bureau of Statistics said in its report released on Wednesday.

"Despite the fall in GDP volume there was an increase of 0.3 percent in real gross national income driven by an increase of 5.8 percent in the terms of trade on the back of stronger commodity prices."

Forecasts for the March quarter ranged between a fall of 0.2 percent and a slump of 2 percent in a survey of 25 financial institution economists by Bloomberg.

The median forecast centered on a steep fall in GDP of 1.1 percent, putting it close to the actual result.

The Australian dollar jumped around half-a-cent on the data, from 106.72 to 107.18 U.S. cents, as some of the worst analyst predictions of falls between 1.5 to two percent did not come to pass.

Source: Xinhua
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