SYDNEY, June 6 (Reuters) - 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 remains a worry.
The local dollar rose about a quarter of a U.S. cent after the Australian Bureau of Statistics reported gross domestic product (GDP) rose 1.0 percent in the first quarter.
That topped market forecasts of a 0.9 pct gain over the December quarter.
- Q1 real gross domestic product +1.0 percent qtr/qtr, seasonally adjusted (Reuters poll +0.9 pct)
- Q1 GDP 3.1 pct vs year earlier (poll +2.8 pct)
- Q1 final consumption expenditure +0.6 pct q/q
- Q1 gross fixed capital expenditure +0.5 pct q/q
- Q1 chain price index +1.1 pct q/q
- Q4 GDP was revised to +0.5 pct q/q from +0.4 pct
- For a brief data table click
JANE CHAN, SENIOR ECONOMIST, ST GEORGE BANK, SYDNEY
"There weren't too many surprises in the quarterly data, although household spending was a little weaker than expected. The strength has really come from a turnaround in exports.
"I think we need to take the strength of the March quarter in conjuction with the quite weak December quarter last year. In that context, the picture is not as strong as what the headline number is suggesting.
"The economy is looking okay, but there are still risks to the outlook particularly from the household sector and from house prices. They are the key risks for us. On the other hand, the business sector is looking like it's in a good shape and the public sector is strong too."
The Australian dollar rose about a quarter of a U.S. cent to around $0.7660 after data showed Australia's economy grew 1.0 percent in the first three months of this year from the preceding quarter, beating market expectations.
The Australian Bureau of Statistics Web site is: http://www.abs.gov.au
- The median forecast favoured a brisk rise of around 0.9 pct in GDP, though they ranged from a 0.6 pct to 1.1 pct gain.
- GDP was seen up around 2.8 pct on the same quarter last year. The range was 2.6 to 3.0 pct.
- Early data implied exports, business inventories and government spending added to growth while household consumption also made a reasonable contribution.
- Major doubts surround the sustainability of household consumption as record-low wages growth and punishingly high levels of debt weigh on spending power.
- Nominal GDP was set to see a sizable increase thanks to gains in commodity prices and mining profits, though the best of that seemed to be over.
- Measures of domestic inflation were expected to remain subdued with retail prices pressured by intense competition and plenty of slack in the labour market. (Reporting by Swati Pandey)