By Nick Mann | 5 September 2012
Australia’s economic growth slowed to 0.6% in the second quarter thanks largely to falling coal and iron ore prices, according to official figures published today.
The Australian Bureau of Statistics’ latest growth data represents a marked downturn from the 1.4% recorded in the first three months of the year. On a year-on-year basis, the Australian economy grew by 3.7% compared with the figure for April to June 2011.
Despite the slowdown in growth, Australian treasurer Bill Swan said the country’s economy was still growing faster than that of every other major economy. It has also experienced a ‘remarkable’ 21 consecutive years of growth, he said. ‘Those 21 years of growth – during that time we’ve been up against a lot – they are a stunning achievement that leaves every other advanced economy in our wake.’
No advanced economy comes close to our extraordinary streak of growth over this period, which is over twice as long as the next best performer. It’s a very, very strong result for Australia. It’s something I think that all Australians can be very proud of.’
Swan did, however, acknowledge that Australia was not immune from the impact of the continuing eurozone crisis and subdued US growth.
‘While our terms of trade do remain at high levels, we have seen further declines in coal and iron ore prices in recent months,’ he explained. ‘What this tends to reflect is weak growth in advanced economies, more moderate growth in our region along with strong growth in the supply of these commodities.
These bigger-than-expected declines in commodity prices, and the accompanying fall in tax revenues, had made the government’s task of delivering its promised budget surplus in 2012/13 harder, he said.
But Swan said the government had a proven track record of delivering savings and was ‘able and willing’ to do it again.
He added: ‘The medium term outlook still remains strong. It hasn't changed. We do expect commodity prices to remain at historically high levels over the medium term, supported by robust demand in our region.
‘And of course we have the confidence that we can face the challenges coming from the region from our position of strength.
