Country Report Australia October 1996 Main report

Economy: Economic growth eases

As expected, the rapid GDP growth recorded during the first quarter of 1996 (2.2%, real terms, expenditure measure seasonally adjusted) fell away during the second (to just 0.2%). Net exports pulled 0.9 percentage points off real growth during the quarter, as exports fell and imports rose. Private consumption and business investment each added 0.3 percentage points, while the growth in stocks contributed 0.7 percentage points. The stock build-up is believed to have been involuntary and is expected to be unwound. Most of the increase in stocks occurred in the wholesale sector, and essentially reflects weakness in the retail market. Wholesalers are likely to reduce their orders from manufacturers, who, given their own high levels of inventory, will cut back production.

Real GDP growth (expenditure measure) amounted to 4.3% during fiscal year 1995/96 (July-June), slightly higher than the 3.5% figure recorded in 1994/95. However, the sources of growth varied markedly. During 1994/95 growth was broadly based, with the main contributors being private consumption spending (2.8 percentage points), business investment (1.6 percentage points), government investment and government consumption (0.6 percentage points, and stocks (0.4 percentage points). Net exports pulled 2.6 percentage points off growth for the year. By 1995/96 the main contributors to growth had narrowed to private consumption (2.6 percentage points), business investment and net exports (1 percentage point each). The major factor pulling back growth was spending on dwellings (which cut 0.8 percentage points off growth).

Gross domestic product (A$ m at average 1989/90 prices, seasonally adjusted; % change quarter on quarter in brackets) 1995 1 Qtr 2 Qtr 3 Qtr 4 Qtr Private consumption 62,658 63,566 64,252 64,958 (0.6) (1.4) (1.1) (1.1) Public consumption 17,653 18,093 17,518 18,276 (1.0) (2.5) (-3.2) (4.3) Private investment 18,124 18,132 18,205 17,692 (-1.8) (0.0) (0.4) (-2.8) Public investment 5,021 4,894 5,094 4,745 (-0.1) (-2.5) (4.1) (-6.9) Change in stocks 374 546 1,554 264 (-0.5)(a) (0.2)(a) (1.0)(a) (-1.2)(a) Exports of goods & 22,642 22,228 23,258 23,926 services (2.2) (-1.8) (4.6) (2.9) Imports of goods & 23,136 23,044 22,871 23,097 services (2.9) (-0.4) (-0.8) (1.0) GDP (expenditure based) 103,336 104,415 107,010 106,764 (-0.5) (1.0) (2.5) (-0.2) GDP (income based)(b) 104,289 105,549 106,303 107,158 (0.1) (1.2) (0.7) (0.8) GDP (production based) 102,319 103,060 104,919 105,498 (0.7) (0.7) (1.8) (0.6) GDP (average measure) 103,315 104,008 106,077 106,473 (0.1) (0.7) (2.0) (0.4) 1996 1 Qtr 2 Qtr Private consumption 65,799 66,153 (1.3) (0.5) Public consumption 18,320 18,126 (0.2) (-1.1) Private investment 18,412 18,842 (4.1) (2.3) Public investment 5,347 5,047 (12.7) (-5.6) Change in stocks 187 1,078 (-0.1)(a) (0.8)(a) Exports of goods & services 25,458 25,176 (6.4) (-1.1) Imports of goods & services 24,440 25,116 (5.8) (2.8) GDP (expenditure based) 109,083 109,306 (2.2) (0.2) GDP (income based)(b) 109,028 109,305 (1.7) (0.3) GDP (production based) 107,570 107,339 (2.0) (-0.2) GDP (average measure) 108,560 108,650 (2.0) (0.1) (a) Change as a percentage of GDP in the previous period. (b) Includes statistical discrepancy. Source: Australian Bureau of Statistics, Australian National Accounts.

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
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