Shrinking trade surplus to be short-lived

Miranda GreerMar 03, 2017

Regardless, the latest report showed that the decline of the fourth quarter was "less severe than the decline recorded in the previous [third] quarter, of -2.24 percent, but was nevertheless lower than the growth rate recorded in the final quarter of 2015, of 2.11 percent".

Annualised growth was 2.4 per cent nationally, according to the Australian Bureau of Statistics.

The fourth quarter figure translates to estimated economic growth rate of -1.51 per cent for the full year, meaning that the Nigerian economy performed better overall last year as the growth rate was higher than the contraction of -1.8 per cent predicted by the International Monetary Fund (IMF).

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"The decent rebound in real GDP in the fourth quarter doesn't just dash any lingering fears that Australia was in a recession, but it also boosts hopes that the surge in commodity prices will trigger a rapid recovery", he said.

Helping keep the economy growing, the solid 0.5 percentage point contribution from household consumption was financed by consumers running down their savings.

The economy may contract by less than 1 percent in the first three months of 2017, before resuming expansion in the second quarter, Yinkere said. The median of 10 economist estimates compiled by Bloomberg was for the economy to shrink by 1.4 percent. Mining, agriculture, forestry and fishing and professional scientific and technical services contributed heavily to the GDP growth.

Coal and iron ore prices and liquefied natural gas exports would help turn things around in coming months, he said.

Australia's terms of trade, a measure of the relative value of exports and imports, improved 9.1 per cent in the fourth quarter. The terms of trade are now 15.6% higher than the December quarter of 2015.

Commonwealth Bank chief economist Michael Blythe said the Reserve Bank should be happy with the growth numbers.

Nominal GDP grew 3.0 percent to be 6.1 percent higher through the year.

The Australian central bank is predicting 2017 growth of 3%, based on the assumption that commodity prices will continue their recovery.

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