Australia Q1 GDP growth beats expectations

[SYDNEY] Australia's economy entered its 27th year without a recession thanks to bumper exports and a jump in business investment, although uncertainty over the outlook for household consumption and global trade remains a worry.

Gross domestic product (GDP) expanded by 1 per cent in the first quarter, from an upwardly revised 0.5 per cent in the December quarter, data from the Australian Bureau of Statistics showed on Wednesday.

Annual growth sprang ahead to 3.1 per cent, from December quarter's 2.4 per cent.

The result just topped market forecasts of growth of 0.9 per cent for the quarter and 2.8 per cent on-year, pushing the local dollar up a quarter of a cent to US$0.7660.

The Reserve Bank of Australia (RBA) had sounded upbeat about future economic growth on Tuesday but kept interest rates steady at 1.5 per cent in anticipation of a gradual revival in inflation.

Investors suspect policy will stay on hold for a long time to come and interbank futures are not fully priced for a hike until September 2019.

REUTERS