[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 4 September 2007, 07:07 GMT 08:07 UK
Australian growth beats forecasts
Australian farmer overlooks land impacted by drought
The government said the growth was remarkable given the drought
Australia saw its economy expand more than expected in the three months to June, spurred by greater investment.

The economic grew 0.9% over the quarter - beating forecasts of 0.6% - taking the annual rate of growth to 4.3%, its fastest pace in three years.

Growth was helped by investment in the mining sector, which has been growing to meet strong demand from China.

"This economy is on fire," said Joshua Williamson, a senior economist at TD Securities.

"This is the third strong quarterly GDP number that we have had," he added.

'Remarkable'

Economists had feared that Australia's drought - the worst on record - could severely dent economic growth.

Treasurer Peter Costello said the farm sector was still being badly impacted by the drought, making the growth even more unexpected.

"That makes the overall growth even more remarkable - that our economy grew as it did, at 4.3% notwithstanding a very severe drought and a very severe downturn in farm production," said Mr Costello.

There had been expectations that Australia would raise interest rates before the end of the year - although analysts say the recent turmoil on the world's financial markets has made this less likely.

John Edwards, chief economist with HSBC said: "GDP is much stronger than the market expected. The probability for a rate rise this year is a bit firmer that it was but it certainly won't be tomorrow."


SEE ALSO
Drought slows Australia's economy
06 Dec 06 |  Business
Australian drought 'to cut GDP'
13 Nov 06 |  Business
Wheat prices jump to 10-year high
11 Oct 06 |  Business
AWB faces $1bn US farms lawsuit
11 Jul 06 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific