Floods Lead to Fall in Australian Output

Thursday, June 02, 2011

The devastating impact of Australia's summer of floods and cyclones was underlined on Wednesday when official data showed the nation's economy suffered its largest quarterly contraction in 20 years. Gross domestic product in the three months ending in March fell 1.2 per cent, down from growth of 0.8 per cent in the quarter ending in December, after Australia's flood-hit coal exports fell 25 per cent.

Australia, boosted by Asia-powered demand for iron ore, coal and agricultural products, has had one of the strongest economies in the developed world with an uninterrupted annual growth streak spanning two decades.

However the floods, which also hit the farming sector, led to the first quarterly decline in the economy since the final quarter of 2008, following the collapse of Lehman Brothers, the US investment bank, when output fell 0.9 per cent.  Housing and retail spending have also softened this year, while manufacturing and tourism operators exposed to the high Australian dollar are also suffering.

Wayne Swan, Australia's treasurer, said the natural disasters had taken a heavy toll. He added Queensland's economy appeared to be bouncing back.

For more information on this story, please go to http://edition.cnn.com/2011/BUSINESS/06/01/australia.floods.gdp.ft/index.html?iref=allsearch

 



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