Australia’s strong contribution from exports in the first three months of the year looks like saving the Turnbull government from the embarrassment of a weak set of economic growth figures during an election campaign.
Prime Minister Malcolm Turnbull jumped on new data showing exports will contribute 1.1 percentage points to the growth result in Wednesday’s national accounts for the March quarter, AAP reported.
“What we’re seeing here is the benefit of our big trade export deals ... our national economic plan is already working,” Turnbull told reporters in Sydney on Tuesday.
“What we’re asking the Australian people for on July 2 is the mandate to complete that economic plan, to stick with our plan and deliver on the strong economic growth.”
Economists upgraded their forecasts for growth in the first three months of the year following the latest international trade data, which will leave the annual rate close to the 3% that was recorded over 2015.
National Australia Bank senior economist David de Garis says there is “significant upside risk” to his forecast for a 3% outcome.
However, before the figures government ministers appeared to be pre-empting the risk of a disappointing result in the national accounts.
“What they will underscore is it remains a very sensitive time for our economy,” Treasurer Scott Morrison told Adelaide’s 5AA radio.
While Finance Minister Mathias Cormann denied he was laying the groundwork for poor figures, he said, Australia continues to face global economic headwinds.
Masking Reality?
“We have in front of us many exciting opportunities, but we also have to deal with pressures from lower global economic growth,” he told reporters in Canberra.
But shadow treasurer Chris Bowen said the government knows the headline growth figures mask an economy struggling with falling demand and falling income growth.
“Strong growth in resource exports are a good thing, but they won’t generate good well-paying jobs,” Bowen told AAP.
“The government promised jobs and growth, what we are getting is jobless growth.”
He said the government has presided over record falls in living standards and wages growth at its slowest rate in decades which is putting extra pressure on households around Australia.
Australia’s quarterly trade deficit narrowed marginally to $20.8 billion, the fifth worst result on record, while foreign debt kept growing above $1 trillion, ABC reported.
In seasonally adjusted terms, the deficit shrank 8% from the revised $22.6 billion figure for the December quarter, which was the largest deficit on record.
Data released by the Australian Bureau of Statistics also showed Australia’s net foreign debt continued to mount, up another 1% over the quarter to a record $1.03 trillion.
