Economic growth at highest point in three years
IN PERFECT timing for Prime Minister Malcolm Turnbull, newly released statistics have revealed Australia's fastest annual economic growth in three-and-a-half years.
The Australian Bureau of Statistics figures on national income, expenditure and product for the March 2016 quarter showed the economy grew by 1.1%, despite forecasts of 0.8% growth.
Over the past year the economy has grown by 3.1%.
The largest contributions to growth came from net exports, household spending, government consumption and dwelling investment.
Mr Turnbull claimed the growth was a result of the Coalition government's economic plan and strong leadership.
During a radio interview about the Federal election, shadow treasurer Chris Bowen said the headline data was driven by net exports, but underneath was an economy struggling with falling demand and income growth.
The biggest drag on growth was from non-residential building and machinery and equipment investment.
Although the mining sector was the strongest, with production growth of 6.2%, the figures showed the economy was transitioning from mining-based investment to production.
The ABS said service-based industries were the other contributor to growth, with increases in finance, retail trade, accommodation and food services, and arts and recreation.
CommSec chief economist Craig James said in his report on the new data that "gloomsters" would say the growth was unsustainable, unbalanced or even both.
"But it is hard to argue with a mountain of evidence," he wrote.
"Exports, tourist arrivals, home prices, building approvals and car sales are at record highs.
"Unemployment is at two-and-a-half year lows.
"The economy is not only growing at the fastest rate in three-and-a-half years, it is growing faster than the 'normal' rate."
The ABC reported Capital Economics' Paul Dales said Australia was "worryingly reliant" on commodity exports and there would be a growth hole later this year.
Mr James said the Reserve Bank could consider cutting rates, which risked boosting the real estate market and bringing about an unsustainable housing boom.
But Capital Economics forecast the RBA would not rush to cut interest rates again because of the surge in Gross Domestic Product.
- ARM NEWSDESK