Australia’s economic growth exceeded expectations in the first quarter with a more rapid recovery driven by rising household spending and business investment.
The Australian Bureau of Statistics reported Gross Domestic Product (GDP) rose 1.8% in the first quarter of this year. The market previously expected growth of 1.5% following a 3.2% increase from the revised reading in the last quarter of 2020.
This is the third consecutive month of growth in the economy, amid continued monetary and fiscal stimulus.
Following this encouraging reading, Aussie dollar trading gained support to trade higher in the Asian session.
Investors have previously been disappointed by the Reserve Bank of Australia’s decision not to make changes to its policy stance at its June session meeting, despite widespread rumors that it may follow the Bank of Canada and the Reserve Bank of New Zealand for more hawkish.
The RBA remains confident of keeping interest rates at 0.10% until the full employment target and sustained inflation are achieved.
RBA Governor Philip Lowe reminded the public that there is still a lot of uncertainty across the country about the possibility of a new coronavirus variant outbreak.
Victoria, the second state with the largest population of Australia, is back under the implementation of tighter restrictions after several cases of Covid-19 were detected in recent days.
