Australia: Rapid economic growth

Australian economy experienced a high rate in growth, as a result of the Chinese demand for iron, spurring speculation for additional increase in interest rates sometime early next year. According to the Australian statistical office, GDP grew by 1.25% compared to the first quarter when it increased by0.7%. The demand for iron ore and coal from China is driving companies such as BHP Billiton Ltd to increase the production and extraction by stimulating one of the few economies that escaped last year’s recession. The higher growth rate than the original estimations may lead the central bank to rise again the interest rates in early 2011.

The announcement of the economic data, lead the Australian dollar to strengthened to 89.69 cents compared to U.S. dollar from the 89.49 cents that was early in the morning today. The yield on the two years bond was strengthened three base points to 4.31% – a base point equals to 0.01%.

In the Stock Exchange the S&P / ASX 200 Index extended its rise after the announcement of data at a rate of 1.9% reaching the 4487.8 points. Additionally, exports increased by 5.6%, adding 1.1% to GDP while household spending rose by 1.6%, contributing 0.9% to GDP.