Australia economy grows 1.7% on-year in Q1, keeps record run of 26 years without recession

The Sydney Opera House in Australia. The country has now matched the Netherlands' record for the longest run without a technical recession.
The Sydney Opera House in Australia. The country has now matched the Netherlands' record for the longest run without a technical recession.PHOTO: REUTERS

SYDNEY (REUTERS/AFP) - Australia's economy hit a speed bump last quarter as bad weather slugged export shipments and home building, though growth was just enough for the resource-rich nation to extend its world record run without a recession to almost 26 years.

The economy grew 0.3 per cent growth in the first quarter from the previous three months, official data showed on Wednesday (June 7). That topped market forecasts of a 0.2 per cent gain and quashed fears the economy might have contracted early in the year.

From a year ago, the economy grew 1.7 per cent, down from 2.4 per cent in the previous three months.

Australia has now matched the Netherlands' record for the longest run without a technical recession at 103 quarters.

The soft quarterly reading was widely expected by analysts amid the impact of Category 4 Cyclone Debbie on eastern Australia in late March.

The local dollar climbed a quarter of a US cent after the news.

"The market was positioned for a weaker number so the result lifted the Australian dollar," said National Australia Bank economist Tapas Strickland. "It is still a soft number, suggesting a bit of weakness in the economy and it's likely to be translated into the second quarter. So overall, it is a soft number but not as soft as some had expected and there is less pressure on the Reserve Bank to ease."