Economy Grows Slightly, Rate Cuts Break Encouraged

Australia’s economy for the first quarter of this year has experienced a slight growth of about 1.3 percent, the fastest in four and half years. 

The said growth is supposed to be double the pace of what was projected by economists. With this development, any plans for making interest rate cuts may no longer be necessary. 

According to Michael Blythe, the chief economist from Commonwealth Bank, the growth puts Australia in a good position, considering the most recent problems with Greece and Europe. The numbers indicate the Australian economy is doing fine and that leaders shouldn’t be pushing for rate cuts every time. 

The latest figures come at the right time, with the Reserve Bank just cutting cash rates by another 25 basis point a day before, in a bid to avoid an economic fall-out. 

USA and China also experienced some significant growth in the first quarter. Stocks, investments and consumer gains, much of it coming from the mining industry, was said to have helped propel this. 

Household spending sprung a big surprise, with economist saying that incomes and strong wages offset weak profits by companies. 

These latest improvements showed an “extraordinary picture of exceptional growth,” which had many optimistic about Australia’s position as a country with one of the strongest economies around the world. 

But other economists were less than positive about the turn of events, citing that export prices and manufacturing output fell in the same quarter. Inflation adjustments also bore insignificant changes.