Australia grew the last quarter of 2016, thus, the country has been 25 years without recession. It brings Australia close to breaking the Netherlands' record. Australia's economy had contracted in the third quarter but the unexpected 1.1% increase pulled the annual figure back to a 2.4% growth rate.
The recovery was due to strong exports and consumer spending. The BBC reports that mining and agriculture had relatively strong growth. Iron ore and coal are Australia's biggest exports and shrinking demand from China has hurt the Australian economy.
Australia has not had a recession since June 1991, it is just one quarter short of the Dutch record set between 1982 and 2008. Australia has had no recession for 25 years. Treasurer Scott Morrison welcomed a 2% rise in business investment in December.
The weakness was just temporary
ANZ analysts stated the figures confirmed that the weakness in the third quarter was just temporary, and underlying momentum in the economy remains strong. Capital Economics chief Australia economist Paul Dales stated the economy was firmly "back on track".
He added that 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 increases hopes that the surge in commodity prices will trigger a rapid recovery.
The outlook for the next year is reasonably bright according to Shane Oliver of AMP Capital. He stated that Australia is seeing an increase in export volumes and we have seen a big rebound in important commodity prices.
He added that the aussie economy should grow 2.5%, maybe 3% over the course of this year. Estimates by the country's central bank point to economic growth boosting to about 3% for 2017 on the back of recovering commodity prices.
The aussie growth continues to be above the OECD average and confirms the successful change that is taking place in the economy. Australia is moving from the largest resources investment boom in its history to broader-based growth.
