Australia economy marks record 26 years recession-free

– Australia marked a world-record 26 years without a recession Wednesday, June 7 after official figures showed another quarter of economic expansion, but analysts warned of uncertain times ahead as growth slows, AFP reports.

The reading beat expectations, with some analysts predicting a contraction following a category four cyclone in late March as well as weak trade figures and tepid wages growth.

The economy grew 0.3 percent in the three months to March for an annual rate of 1.7 percent, the Australian Bureau of Statistics said.

However, while the annual rate was above forecasts — lifting the Australian dollar — it was well down from 2.4 percent in the previous quarter.

“In the context of the past few years, it is still a fairly weak outcome,” JP Morgan economist Tom Kennedy told AFP of the latest figures. “The real issue is that consumption is still pretty soft even though the saving rate fell… and (capital expenditure) was flat, still not doing anything.

“That’s really important for the Australian economy so the domestic drivers of growth in Australia are still pretty underwhelming.”

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Australia last recorded two negative quarters of economic growth in March and June 1991, before enjoying 103 quarters without a recession to equal the record run set by the Netherlands, which ended in 2008.

Australia has also benefited from China’s economic growth and hunger for natural resources, which led to an unprecedented mining investment boom and record commodity prices.