Official figures have revealed that the Australian economy expanded during the last quarter of 2013, narrowly beating the expectations of analysts.
It had predicted that growth for the three-month period to the end of December would stand at 0.7 per cent, which is the same figure as for the third quarter of the year.
But the release of new figures from the Australian Bureau of Statistics showed that growth for the last quarter of 2013 actually stood at 0.8 per cent.
The country's central bank – the Reserve Bank of Australia (RBA) – has also announced that interest rates are going to be held at their current level of 2.5 per cent for another month. In the UK, it is five years to the day (March 5th) since interest rates were lowered by the Bank of England to a new record low of 0.5 per cent.
Shane Oliver, head of investment strategy with AMP Capital in Sydney, explained that even though the mining sector only contributed 0.1 per cent of growth, other parts of the economy have been taking up the slack.
"There's a slump occurring in investment, there's no doubt about that as indicated in figures last week, but that's being offset by consumer spending, housing activity and trade," he said.
Matthew Johnson, an interest rate strategist with UBS, added that a good increase in private consumption, which was up by 0.8 per cent over the course of the quarter, has been among the main drivers of growth in the three-month period. Mr Johnson said: "Overall, it's a good quality result but not great … We still think rates are on hold this year."
Glenn Stevens, governor of the RBA, stated that spending in the resources sector is set to decline significantly, although he remains bullish about the state of the Australian economy overall. He said in a statement: "Recent information suggests slightly firmer consumer demand and foreshadows a solid expansion in housing construction. Some indicators of business conditions and confidence have shown improvement and exports are rising."
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