Economy continues growth path
The Australian economy grew faster than expected in the March quarter, increasing the probability that the Reserve Bank will increase rates further in its fight against inflation. Gross domestic product expanded by 0.6 per cent during the three months to the end of March while growth in household spending was halved to 0.7 per cent. Acting Treasurer Lindsay Tanner said that the results were good news about economic growth, but that more would need to be done to control inflation which rose 1 per cent in the quarter. Fears of a wages breakout have been quelled with an increase of only 0.5 per cent in the March quarter after surging 2.2 per cent in the June quarter and 1.3 per cent in the September quarter. Spending on interest has jumped 22.9 per cent over the past year and there are signs that people are using their cars less and cutting spending at restaurants.
Source: The Australian