Australia economy grows 2.5 percent on year in Q3

Flag of Australia on a beach
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Flag of Australia on a beach

Australia's economy grew a shade more than expected in the third quarter as a sharp increase in mining activity boosted net exports, data released Wednesday showed.

The economy grew 0.9 percent from the previous quarter, the Australian Bureau of Statistics said. The median forecast in a Reuters poll was for a 0.8 percent expansion. In the three months to June-end, the economy grew 0.2 percent on-quarter.

Gross domestic product grew 2.5 percent in the three months through September compared to the same period last year, a smidgen higher than the median 2.4 percent expansion forecast in a Reuters poll.

Australia faces another year of disappointing, if moderate, economic growth but that performance would actually be "respectable" given the sheer scale of the mining boom the country has been through, Australia's top central banker said on Wednesday.

Speaking in Perth just before the GDP figures were released, Reserve Bank of Australia (RBA) Governor Glenn Stevens noted that past booms had ended with galloping inflation, severe monetary tightening and eventual bust.

Australia's economy has grown more modestly recently, as a slowdown in China has curbed demand for Australia's commodity exports. Yet, the latest GDP release suggested some improvement.

Mining activity was up 5.2 on quarter, helping the net exports component contribute 1.5 percentage points to GDP growth. However, investments remained weak while construction tied to mining plunged 7.1 percent.

-Reuters contributed to this report.