Australian economy unexpectedly shrank by 0.5% in the third quarter of 2016, against the expectations of the analysts for growth of 0.3%. It was the first decline of the country’s economy since the first quarter of 2011 and the largest since the last quarter of 2008. In the three months between July and September, the final consumption expenditure rose by 0.3%. The household spending rose by 0.4%, driven by rising prices in hotels, cafes and restaurants.
The private investment in Australia fell by 0.8%, while public investment fell by 10.4%, erasing 0.5% of economic growth. The exports of goods and services increased by 0.3%, while the imports grew even faster pace of 1.3%.
In the field of industrial, the mining decreased by 0.8%. The decline was also reported in construction (-3.6%) and in retail trade (-0.8%).
At the same time growth was observed in agriculture by 7.5% and in the field of media and telecommunications, where growth reached 1.6%.
Since the beginning of the year the economy expanded by 1.8%, while slowing to annual growth of 3.3% reported in late June that surpassed expectations for growth of 2.5%.
However, one negative quarter does not meet the widely accepted definition of a recession, which requires two falls in a row, and last occurred in Australia in the first half of 1991. Another positive is that GDP has rebounded by 1.1% in the quarter immediately after each of the previous three negative quarters since the early-’90s recession.
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