Drought shrinks GDP

The latest national accounts figures show that the gross domestic product (GDP) grew by 4.3 per cent during the year to September, after increasing by 1 per cent in the quarter. Farm GDP has fallen by 6.9 per cent over the year due to the drought while the non-farm sector grew by 4.5 per cent. While this is a strong result it was slightly lower than market expectations so investors trading on the Sydney Futures Exchange cut the probability of a rate rise in February from 63 per cent on Tuesday to 41 per cent.