Weak commodities rein in Australian growth
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Version 0 of 1. Australian economic growth came in at just half the rate economists had expected in the second quarter, sparking fears that the slowdown in China is having a knock-on effect on its neighbours. Australia, particularly Western Australia, is highly dependent on Chinese demand for its coal, iron ore and copper and has been hit by falling demand from Chinese manufacturers. GDP growth came in at just 0.2 per cent quarter on quarter and 2 per cent year on year, against forecasts of 0.4 per cent and 2.2 per cent, respectively. The economy grew by 0.9 per cent in the first quarter. The Australian Treasurer, Joe Hockey, played down lower commodity prices and said: “The transition away from a reliance on mining investment is well under way. “Quite clearly there is resilience in the Australian economy that other economies that have huge exposure to commodity prices could only wish for,” he added. Chinese shares staged something of a recovery in late trading before a two-day public holiday to mark the 70th anniversary of its victory over Japan in the Second World War. The Shanghai Composite index, which had been down 4 per cent, closed just 0.2 per cent lower. Chinese shares have fallen more than 20 per cent since mid-August and 39 per cent since the bull market run ended in June. In Hong Kong the Hang Seng index fell 250 points to 20,934.94, its lowest close since July 2013. European shares meanwhile enjoyed a quieter day, with London’s benchmark FTSE 100 index ending up 0.4 per cent at 6,083.3. Bourses in Paris and Frankfurt both closed up 0.3 per cent. In New York, the benchmark Dow Jones snapped a three-day losing streak to end up 1.8 per cent at 16,351. |