Australian Economy in the first quarter.....

Australian economy ignores the sluggish global recovery

The economic growth in Australian continued its forward track to achieve more gains amid the crisis facing the global economy such as the European debt crisis and Japanese quake that had negative results on the global economic recovery.

Today, the Australian economy confirmed that the business investment sector has gained a great performance during the first quarter of the year, which is the third consecutive quarterly increase, affected by the improvements in mining sector.

Australian private capital expenditure index continued increasing during the first three months by 3.4%, compared with the previous incline of 1.3% a quarter earlier, which was revised to 1.5%, while the actual reading came better than analysts' expectations of 2.7%.

The Australian economy has witnessed a resources boom this year, drived up by the BG Group's project that will start work on a $15 billion liquefied natural gas venture in Queensland, generating 5000 jobs, while data in recent days have shown Australian wages grew at the fastest annual pace in almost two years and business investment reached a record.

Australian employers added 37,800 workers in March, more than economists forecast, led by hiring in the mineral- and energy-rich states of Western Australia and Queensland. The country recorded its biggest annual job gain on record last year.

In the wake of the government's efforts to put the economy on the track, the Reserve Bank of Australia (RBA) decided this month to leave interest rates steady for the fourth consecutive month at the highest level of 4.75% to support the economy after the floods and cyclone damage that hit the nation.

Moreover, the government forecasts mining investment to reach A$76 billion next fiscal year, spurring companies to hire workers and prompting the RBA to predict the unemployment rate will fall to 4.25 percent by December 2013. Australia recorded its biggest annual job growth on record last year before hiring cooled down.

On the other hand, the RBA sees the global economy will start its rebounding step from strong growth in the Asian region. The recent disaster in Japan is having a major impact on Japanese production and some effects on production of manufactured products. Commodity prices, including oil prices, have generally continued to rise over recent months, pushing up measures of consumer price inflation in many countries.

Furthermore, Australian trade balance indicator recorded a surplus, exceeding market's expectations because of the demand for Australian iron ore and coal exports accelerated this period. Exports have outpaced higher imports of gasoline.

Yet, the global economy has increased its confidence for the Australian economy, fueling the demand for the Australian dollar versus other major currencies.