(Source: Australian Financial Review, Sydney Morning Herald – March 5, 2014)

Reserve Bank of Australia member John Edwards says the latest GDP data shows Australia’s economy had shaken off the threat of a serious downturn and appears to have turned a corner.

Mr Edwards believes the upbeat growth figures are an encouraging sign that Australia is successfully shifting from being driven by mining investment to other sources of demand, such as home construction.

Figures from the Australian Bureau of statistics showed the Australian Economy expanded faster than expected in the December quarter, but remains well below the long term trend.

The data showed GDP in the three months to the end of December grew a seasonally adjusted 0.8 per cent. For the 12 months, GDP grew at 2.8 per cent, but still below the growth trend forecast of 3.25 per cent.

Australia’s economic growth

GDP growth in Australia over the past five years (year-on-year rate, seasonally adjusted).

(Source Australian Bureau of Statistics)

ANZ senior economist, Felicity Emmett said, “the early signs are that the economy is picking up,

housing investment is set to pick up strongly this year, household consumption spending looks to be trading higher and the outlook for non-mining investment look to be improving.”

Commonwealth Bank economist, Diana Mousina said the data showed “a stronger indication that the mining to non mining growth transition is proceeding.”

Meanwhile, Australia’s largest trading partner, China said it would maintain a 7.5 per cent growth target for this year. China has held the same target over the past two year, with growth in the world’s second largest economy seen as supportive for Australia