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The Reserve Bank of Australia (RBA) said it now expected growth of 3.5 percent for 2012, instead of the 3.0 percent forecast in May, with the domestic economy powering on at above-average pace in the first six months of the year.
Australia’s mining-driven economy expanded 1.3 percent in the three months to March -- a result hailed as “remarkable” by the government given the cooling in China and Europe’s woes.
Even if some of the March quarter growth is revised downwards when the next growth reading is released in September, the RBA said “the data currently suggest that growth in activity may have been above trend over the first half.” A solid rebound in household spending and continued strength in resource investment were seen as the main drivers.
Looking ahead, the bank warned that the boom in mining and energy-related spending was expected to peak “sometime in 2013-14” and begin modestly subtracting from growth over 2014.
- AFP
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