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Annual economic growth speeds up to 2.8pct

 

Australia's economic expansion sped up to an annual growth rate just short of three per cent in the September quarter.

The economy expanded by 0.6 per cent in the quarter, shy of the 0.7 per cent result expected by economists.

This left the annual rate at 2.8 per cent, up smartly from 1.8 per cent previously, as the 0.4 per cent growth contraction recorded in the September quarter 2016 dropped out of the equation.

Treasurer Scott Morrison labelled the national accounts "another encouraging set of numbers", reinforcing the government's economic strategy of this government that was based on driving growth through increased investment.

So far this year, Australia had experienced the strongest jobs growth in 40 years, with four out of five jobs being full-time, he said.

The latest growth figure was above the OECD average.

"This puts Australia back up towards the top of the pack for major advanced economies around the world," Mr Morrison told reporters in Canberra on Wednesday.

He noted household consumption was "soft", but October saw some improved retail figures.

"I would hope Australians are feeling in a position where they can go out and celebrate this Christmas and holiday season and I'm sure their kids are hoping they will be spending," he said.

The main driver of economic growth had been public and private investment.

Private investment's contribution to growth tripled in the quarter, while public investment was up 12.6 per cent over the year.

Defence force spending was up 31 per cent over the year.

Leaving the cash rate at a record-low 1.5 per cent on Tuesday, Reserve Bank governor Philip Lowe said he expected GDP growth to average around three per cent over the next few years.

Treasury will use the national accounts to refine its own forecasts for the mid-year budget review, which will be handed down by Mr Morrison later this month.