The stand-out performance of the Australian economy was maintained in the March quarter 1999.
GDP grew by 1.1 per cent in the quarter and by a very strong 4.8 per cent through the year to the March quarter. This sustained strong economic growth and low inflation is a first class performance by world standards.
Australias growth of 4.8 per cent is higher than the major industrialised economies of 1.6 per cent and more than twice the OECD average of 2.2 per cent. It is higher than the United States, which grew by 3.9 per cent.
This is the sixth consecutive quarter of growth at 1 per cent or above the first time this has ever occurred in Australia.
The economy is being driven by very strong growth in domestic demand that will underpin continued solid employment growth.
Business investment grew by 9.6 per cent in the quarter with plant and equipment up 21.6 per cent. Strong consumer spending continued an outcome of the low interest rates and low inflation that this Governments economic policies have delivered.
Net exports detracted from growth in the March quarter. This is to be expected in a period of slow world economic growth and robust growth in domestic demand. While our exporters continue to be aided by low interest rates and a competitive exchange rate, the relative weakness in exports in the March quarter is clear evidence of the difficult world trading conditions. As the world economy strengthens into 2000, net exports will again contribute to growth. However, as highlighted by yesterdays current account deficit for the March quarter, fiscal policy will need to ensure that the Commonwealth continues to make a positive contribution to national saving.
Growth in the March quarter was spread widely across the economy, with particularly strong growth recorded in agriculture, mining, communication services and wholesale trade.
The Accounts provide further evidence of subdued price pressures, with the household consumption deflator rising by only 0.4 per cent in the March quarter and by 1.7 per cent through the year, in line with the movements in the Consumer Price Index.
In short, todays National Accounts once again demonstrate the tangible benefits for an economy of sound macroeconomic policies and ongoing structural reforms. Despite the Asian recession and slow world growth, we have achieved sustained strong economic growth, subdued price pressures, rising real wages supported by growth in productivity and healthy corporate profits.