What causes the economic growth of Australia?

Market Leader informed

In its latest GDP report the Australian Bureau of Statistics showed that the country’s economy is in healthy condition and there are no reasons for concern. The GDP has grown by 0.7%, which is 0.1% better than expected.

The main source of the economic growth is the continuous investment inflow in the mining and energy sectors of the Australian economy. The unsatisfied demand shown by Asia, especially by China, makes numerous Australian companies expand their production while the growing export revenues have a positive impact on the overall economic situation in the country. Positive GDP value, high employment and significant capital inflow put Australia at the same level with the world’s most developed economies.

The data correspond to the forecasts made by the Reserve bank of Australia. During the latest RBA meeting it was stated that the current interest rate is quite acceptable for today’s economic state of affairs and there no need to increase it. However, Australia’s weak consumer demand makes some people concerned.

Economists warn that the GDP growth may slow down in Q1 2011 because of the damage caused by the recent floods and cyclones which hit the East coast of Australia in December-January. The state of Queensland, producing 20% of the national GDP, suffered greatly, which will is expected to affect the GDP in the 1^st quarter of the year. They expect it to decline 0.1% mainly at the expense of lower agricultural and mining export revenues. However the experts reassure that the decline will be short-term.

Forex couldn’t but react to the positive data, resulting in an upsurge of the Australian Dollar currency rate. According to the Department of studying Masterforex-V trading system , AUDUSD is actively developing a bullish momentum (wave c (C )) of level H8. If there is a bullish FZR of H8, one can anticipate the high of 2010 to be updated in the short run, with resistance levels at 1,0202 and 1,0255. Otherwise, if the price comes out of the sloping channel with a downward movement, it may turn out to be a reversal bearish momentum, indicating that the currency pair is determined to go for a correction in the form of the classic ABC pattern.

 

 

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