(MENAFN- AFP) Australia's economy strengthened last year supported by consumer and government spending, data showed on Wednesday, with the better-than-expected figures raising expectations the resources-dependent nation is emerging out of a recent slump.
Economic growth expanded by 0.6 percent in October to December to take the annual rate of expansion to a surprise 3.0 percent, figures released by the Australian Bureau of Statistics showed.
The surprise improvement beat market expectations of fourth-quarter growth of 0.4 percent for year-on-year growth of 2.5 percent, and sent the Australian dollar jumping almost half a cent to 72.19 US cents.
"Today's December quarter national accounts show once again that Australia continues to successfully manage the transition from the largest resources investment boom in our history to broader-based growth," Treasurer Scott Morrison told reporters in Canberra.
"We are growing faster than every economy in the G7, growing well above the OECD average. We are growing faster than the United States and the United Kingdom. More than twice the pace of comparable resource-based economies like Canada."
The healthy figures were further supported by an upwards revision of the September quarter growth rate from 0.9 percent to 1.1 percent, the strongest three-month reading since March 2012.
Household spending contributed 0.4 percentage points to the December quarter growth while public gross fixed capital formation added 0.2 percentage points to GDP, the data showed.
The Australian economy has slowed as the country exits an unprecedented mining investment boom that has helped it avoid a recession for 24 years, with the jobless rate rising above a decade-high, subdued wage growth and tepid business investment outside the resources sector.
The Reserve Bank of Australia has been cutting interest rates since November 2011, with the last cut in May 2015 taking it to a record-low of 2.0 percent, as it sought to boost growth in non-mining sectors. The central bank kept the cash rate on hold on Tuesday.
But the labour market showed signs of strengthening in late 2015, while consumers appeared to be more willing to open their wallets amid a booming residential housing sector.
"The latter half of last year looks a fair bit stronger than was realised at that time," JP Morgan senior economist Ben Jarman told AFP. "A lot of the most recent strength comes from consumer spending."
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