MELBOURNE, June 4 – Australia on Wednesday unveiled surprise economic growth of 0.4 percent, defying widespread expectations of a technical recession thanks largely to a leap in exports.
Most analysts had expected Australia to slide into its first recession since the early 1990s but stronger-than-expected export figures released just a day earlier boosted the GDP figure for the March quarter, economists said.
The result, which averts a second successive quarterly contraction, helped send the Australian dollar to an eight-month high of 82.36 US cents, up 1.67 US cents on Tuesday\’s close, while the share market was up 0.52 percent at noon.
The Australian government has pumped more than 50 billion dollars (41 billion US) into the economy since late 2008 in a bid to stave off recession, while the central bank has aggressively cut interest rates to spur demand.
Commonwealth Securities economist Savanth Sebastian said the GDP figure confirmed Australia\’s position as one of the world\’s strongest developed economies.
"If you look at developed nations around the world, they\’re all negative and quite weak, yet here we are with an actual expansion," he told Sky News.
"It\’s a great result for the Australian economy."
Despite the positive news, some economists said the Australian economy still faced tough times ahead, with large falls expected in employment, business investment and company profit reports.
RBC Capital Markets senior economist Su-Lin Ong warned there was still a chance that Australia could tip into recession this year.
"The global recession is probably only just starting to bear down on Australia," she told Dow Jones Newswires.
"I still think there is a risk that one or two of the next three or four quarters will be negative."
The Australian Bureau of Statistics also revised down its growth reading for the December quarter down from -0.5 to -0.6 percent.