Australia's economy grew by 3% in the last three months of 2015, a significant difference from the same period a year ago.
Australian Economy Grows Beyond Expectations in the Last Quarter
The growth was up 0.6% from the third quart and 0.4% more than market expectations.
The main drivers of growth included construction, government spending and household consumption.
The country’s strong economic performance comes in spite of the slowdown in global commodity prices, which have had a significant impact on the country’s oil and mining sectors.
Following news of the strong economic performance, Australia’s ASX/200 rose 1.5%.
According to David de Garis of Nation Australia Bank, “This is a pretty great outcome given that Australia is going through the biggest slowdown in mining in our history.”
Other analysts also said the strong performance meant it was unlikely that the country would embark on further interest rates. The central bank has kept interest rate steady since May 2015 and it decided this week to maintain interest rates at 2% for the tenth month.
Glenn Stevens, the Reserve Bank Governor pointed out that the central bank could be playing it safe given the low inflation rate in the country.
He said, “The continuing low inflation could offers an easier policy option if it is deemed suitable to support demand.”
Analysts point to Australia’s diversified economy as the reason why the country was able to avoid the recession in spite of the collapsing global commodity prices.
Even though many mines have closed and people have lost jobs, Australia still has a thriving finance, tourism, education, business and technology sector, which have markedly benefitted from the country’s weak dollar.
There’s also renewed interest in the agricultural sector. The mining sector has also benefitted from the weak dollar that has made Australian products cheaper against a background of low global demand.
The mining industry has largely benefitted from widespread investment in technology, which has allowed the country to remain competitive amidst a global downturn.