The economy grew a seasonally adjusted 0.6 per cent in the three months to September. Photo: Louie Douvis
The economy has continued to expand at a below-trend pace in the third-quarter of this year, with the annual growth rate at 2.3 per cent.
The economy grew a seasonally adjusted 0.6 per cent in the three months to September, after expanding by a revised 0.7 per cent in the second-quarter, Bureau of Statistics data released this morning showed.
The year-on-year growth rate for the second-quarter was also revised to 2.4 per cent.
Household saving ratio.
The Australian dollar, which was trading at 91.36 US cents before the release, fell to three-month lows. It was buying 90.56 US cents about 1.30pm.
"Today’s numbers are a reminder of the tough trading conditions in the economy, particularly outside of the mining sector," federal Treasurer Joe Hockey said.
The latest GDP figures showed the Australian economy was underperforming, Moody's Analytics associate economist Katrina Ell said.
"We are cautiously optimistic earlier rate cuts will bring growth back to trend at 3 per cent later in 2014," Ms Ell said, adding that monetary policy could take up to a year to flow through to the economy. The last cut to the cash rate was in August.
"There have been tentative improvements in the interest-sensitive sectors like retail and construction that should improve further in coming months."
Economists had consensus forecasts of 0.7 per cent growth for the quarter and 2.6 per cent year-on-year. Growth in the third-quarter was driven by the mining industry, which added 0.3 per cent to GDP.
The construction, transport, postal and warehousing, financial, public administration and healthcare industries also contribute 0.1 per cent each to growth.
The latest growth figures showed households were continuing to save at high levels. The households savings ratio has risen to 11.1 per cent for the third-quarter, up from 10.2 per cent.
"It means that you can't expect to see consumption as a major driver of growth in the economy. We really need to see housing continue to recover and we also need to see other areas like non-mining business investment picking up," Citi's chief economist Paul Brennan said.
"The picture coming out of these national accounts today suggests that growth is only going to pick up slowly next year. Monetary policy is working, but there's a few headwinds, including the unwillingness of consumers to ease up on the level of their savings."
Mr Hockey said the pace of economic growth was not strong enough to generate jobs for all Australians.
"Combined with other economic data it is clear that the nominal growth forecasts in the [Pre-Election Economic and Fiscal Outlook] will not be reached. This points towards a further deterioration in the budget bottom line," he said.
Balance of payments data released yesterday pointed to signs that a growth transition was underway.
Export volumes grew by 0.1 per cent as import volumes fell by 2.4 per cent for the third-quarter. Net exports were expected to add 0.7 percentage points to third-quarter GDP.
The current account deficit for third-quarter widened to $12.7 billion from $12.1 billion in the previous quarter.
The Reserve Bank had revised down its growth forecasts for Australia in 2014 and 2015 after it said mining investment was set to fall-off at a faster-than-expected pace over the next year.