SYDNEY, Sept. 6 (Xinhua) -- Australia post 0.8 percent growth over the second quarter of this year, the Australian Bureau of Statistics said on Wednesday.
While the result was encouraging after the paltry 0.3 percent rise for the first quarter, not all economists have a rosy outlook for the Australian economy, and chief economist at Capital Economics Paul Dales told Xinhua on Wednesday that this result shows "subdued" growth in Australia.
"The 0.8 percent q/q rise in GDP in the second quarter overstates the health of the economy as it needs to be taken in context of the weak 0.3 percent q/q rise in the first quarter," Dales said.
"The 0.6 percent q/q average of the two provides a better guide to the true trend, which suggests the economy is growing at a subdued rate of about 2.2 percent per year."
The rebound from the previous quarter growth result was due to an increase in activity - stunted last quarter due to weather events - but Dales believes that even as consumption growth increases, the housing market still poses a significant risk.
"The rise in consumption was largely due to yet another fall in the saving rate, from 5.3 percent to 4.6 percent," Dales said.
"Households won't be willing to reduce it much further now that house prices are rising at a slower rate and may soon stagnate - a weaker housing market will soon mean that dwellings investment becomes a persistent drag on growth."
While the manufacturing industry grew by 1.8 percent over the quarter, falling export prices were a 0.1 percent overall drag to the overall GDP result, and the chief economist for the Australian Bureau of Statistics, Bruce Hockman said that falling commodity prices are to blame.
"Recent swings in coal and iron ore prices have had significant effects on the Australian economy in terms of export revenues and real incomes, though export volumes continued to grow in the June quarter," Hockman said.
In terms of the future, Dales believes that the figures show that the Reserve Bank of Australia's growth target of 3.0 percent for 2018 is "too optimistic", and suggested that a figure closer to 2.5 percent is a more realistic target.
Official Australian GDP growth for the 2016-17 financial year was 1.9 percent.
