The Australian economy grew at a surprisingly sluggish rate of 0.3% in the three months to 30 June, taking annual economic growth for 2007-08 to 2.7%.
The Australian economy grew at a surprisingly sluggish rate of 0.3% in the three months to 30 June, taking annual economic growth for 2007-08 to 2.7%.
The economy is now growing at the slowest pace in three years.
The move was below even the pessimistic forecasts of economists, who had expected growth to come in a 0.4%, taking annual economic growth to 2.9%.
The lower-than-expected GDP growth will be music to the ears of the RBA, as it confirms the bank’s view that the economy is slowing and proves that yesterday’s 0.25% rate cut was justified.
The data could even spur the bank into cutting rates again in October.
The local sharemarket posted gains in early morning trade, with bank stocks enjoying renewed investor interest following yesterday’s rate cut. But mining stocks were sold off and the benchmark S&P/ASX200 index was down just 4.8 points at 5111.2 at 12:10 AEST.
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