Australia's economy grew at a slower pace than expected in the third quarter, feeding into economists' concerns about a lopsided expansion as businesses chalk up strong profits while consumers keep their wallets firmly closed.
The economy grew 0.6% in the third quarter from the second quarter, and by 2.8% when compared with a year ago, the Australian Bureau of Statistics said Wednesday. Economists had forecast growth of 0.7% over the quarter and 3.0% over the year.
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On one hand, Australian firms are experiencing the best trading conditions in 20 years, recording strong profits and adding full-time staff at a strong clip. But on the other, there is cloud over the Australian consumer amid record household debt, years of record-low wages growth, and more recently, softening house prices.
Retail sales have been weak since midyear, a major concern given consumer spending represents 60% of the economy.
The statistics bureau said Wednesday that 17 of 20 industries recorded positive growth in the quarter, but household spending was almost flat.
Economists expect the pace of growth to moderate in 2018, as Australia lags behind the global growth pick-up, with interest rates remaining at their current record lows through to 2019. The Reserve Bank of Australia left interest rates on hold Tuesday and has indicated there is little impetus to raise them any time soon.
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(END) Dow Jones Newswires
December 05, 2017 19:54 ET (00:54 GMT)