Australian economy grows 1.2 percent in April-June

AP News
Posted: Sep 07, 2011 12:18 AM
Australian economy grows 1.2 percent in April-June

Australia avoided recession with its economy growing 1.2 percent in the three months through June after shrinking in the previous quarter due to natural disasters at home and abroad, according to government figures Wednesday.

Storms and record flooding early this year destroyed crops worth billions of dollars on Australia's east coast and disrupted coal and iron ore exports. Earthquakes also devastated two key Australian trading partners, Japan and New Zealand.

The economy expanded 1.4 percent in the year through June, the Australian Bureau of Statistics said. It contracted 0.9 percent in the January-March quarter. A recession is generally defined as two consecutive quarters of contraction.

Burgeoning demand from China and India for Australian minerals and energy carried Australia through the global financial crisis with only two quarters of contraction, the first in December 2008.

Treasurer Wayne Swan said the rebound from natural disasters added half a percentage point to growth in the three months through June, the strongest quarterly growth in four years.

"Despite being hit by the most costly natural disasters in our history, the Australian economy has continued to forge ahead of most others in the developed world," Swan told reporters.

"Today's figures send a really powerful message: that even the biggest natural disasters in our history and the worst global downturn in 50 years can't knock us off course," he said.

But the recovery in mining had not been as fast as the government had expected in May when Swan drafted the national budget for the current fiscal year that ends on June 30, 2012.

Some coal mines in Queensland state had yet to return to full production since they were inundated by flood water and rail connections to ports destroyed.

"The impact of the natural disasters has been bigger on our economy than we expected," Swan said.

The government forecast in its May budget that flooding and cyclones in Australia combined with earthquakes in Japan and New Zealand had cut economic growth in the fiscal year to June 30, 2011 by 0.75 percentage point to a yearly figure of 2.25 percent. Swan said that year figure was down to 1.8 percent.

Flooding in eastern Australia since November killed 35 people, damaged or destroyed more than 35,000 houses and inundated crops as well as coal mines.

An earthquake devastated New Zealand's second largest city, Christchurch, and killed at least 169 people on Feb. 22. Japan's northeast coast was laid waste by an earthquake and tsunami on March 11, killing more than 25,000 people.