Australian economic data spurs growth hopes

MELBOURNE, March 3, 2009 (AFP) - Australia posted stronger-than-expected international trade and retail figures Tuesday, sparking hopes the economy may have grown modestly despite the global economic downturn, analysts said.

Australia's current account deficit narrowed 32 percent to a seasonally-adjusted 6.5 billion dollars (4.2 billion US) in the final quarter of 2008, the Australian Bureau of Statistics (ABS) said.

The figure, which followed a 9.5-billion-dollar deficit in the third quarter, was well below market expectations of 7.5 billion.

A key element of the data was a 4.2-billion-dollar improvement in the balance on goods and services, which the ABS said would add 1.5 percentage points in economic growth in the December quarter.

"There was quite a big drop in imports, which might suggest our economy might just stay in the black in the fourth quarter," NAB Capital chief economist Rob Henderson told Sky News.

Westpac chief economist Bill Evans said the positive data should mean gross domestic product figures due out Wednesday will show the economy grew 0.5 percent in the quarter, rather than contracting.

In separate data, the ABS said retail spending rose a seasonally-adjusted 0.2 percent in January, building on a 3.8 percent increase in December, when the government spent 10.2 billion dollars on an economic stimulus package.

Retail spending reached a record 19.2 billion dollars for the month, the data showed, defying analyst expectations it would fall 0.5 percent.

Since the original stimulus package, the government has announced a second range of measures worth 42 billion dollars, although the central bank says it does not expect it to boost demand until later this year.

If Wednesday's GDP figures show the economy slipped into negative territory, it will be the first quarterly contraction in eight years in Australia.

Source: AFP

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