SYDNEY: The pace of growth in Australia will ease this year but remain above long-term trends as its resilient economy reaps the benefits of last year's advance, new data showed yesterday.
The Westpac-Melbourne Institute leading index, which predicts the pace of economic activity six to nine months ahead, showed a 3.9% rise in February, above the long-term trend or average of 3.4%.
“That points to a growth pace around 3.5% to 4% in the second half of 2004, compared with the 5.5% pace in the second half of 2003,” said Westpac Bank chief economist Bill Evans.
The index, which tracks nine gauges of economic activity, showed a reading of 4.1% in January. It peaked at 5.8% in June last year and has held around 4% since October.
Australia's economy has been one of the world's most resilient over the past year, driven largely by a booming housing sector and a partial recovery from the worst drought on record.
As the property sector softens, the economy continues to thrive on improved exports of rural goods and commodities, low inflation, a steady labour market and a stronger US economy.
Evans said there was little chance the central bank would increase interest rates when it next meets in early May.
The Reserve Bank of Australia twice raised rates by a quarter point in November and December to cool the housing sector and stem spiralling household debt and has since left them unchanged at 5.25%. – AFP
Did you find this article insightful?