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Australia avoids sliding into recession with modest growth

Posted on: June 5, 2009


Bernama – Wednesday, June 3

MELBOURNE, June 3 (Bernama) — Australia’s economy posted modest growth in the March quarter, avoiding a technical recession, but it is still not out of the woods, economists say.

Real gross domestic product (GDP) rose by a seasonally adjusted 0.4 per cent in the March quarter, the Australian Bureau of Statistics (ABS) said today.

This followed a downwardly revised contraction of 0.6 percent in the December quarter and upwardly revised growth of 0.2 percent in the three months to September 30.

Over the year to March, GDP rose by 0.4 percent. This was the slowest annual growth in the economy since 1991.

JP Morgan economist Helen Kevans told the Australian Associated Press that while the economy grew in the first quarter, the outlook for the next few quarters was not as rosy.

“We have technically avoided recession.But if you look at the details in the data it is not a pretty picture,” she said.

“We have imports falling off a cliff, which is a symptom of firms smashing investment and which is bad for our employment outlook.

“That fall in imports is the only major reason why we got a significant contribution from net exports in the first quarter,” she added.

Prime Minister Kevin Rudd welcomed the new figures but said the nation’s economy was not out of the woods yet.

“In the worst global economic recession in three-quarters of a century, we have good news for the Australian economy,although we’re not out of the woods yet,” Rudd told reporters.

Exports and household spending helped the Australian economy grow modestly in the March quarter, and avoid a much-feared recession — at least in a statistical sense.

Rudd said Australia was the only advanced economy not in recession.

But he also warned that future periods of negative economic growth could not be ruled out.

Rudd said Australia would already be in recession had the government not invested billions of dollars in cash handouts and infrastructure spending.

–BERNAMA NDC AS

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1 Response to "Australia avoids sliding into recession with modest growth"

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