The Australian economy saw growth pick up in the second quarter, providing further evidence that the country offers a very strong investment opportunity.
Official data from the Australian Bureau of Statistics revealed that the economy expanded by 0.8 per cent in the three months to the end of June, up from 0.3 per cent in the first quarter of the year. The annual growth rate is now 1.9 per cent.
Investors in property and other parts of the economy may be impressed with this jump in gross domestic product (GDP), but what may make the country even more compelling is the consistency of its performance. The latest figure represented the 104th quarter since the country last saw back-to-back quarters of negative growth, the technical minimum duration required to constitute a recession. Not since 1991 has Australia experienced such a downturn.
While the early 1990s recession was a global phenomenon, the far deeper crisis of 2008-09 largely bypassed much of the world. While most western countries were hit hard by the banking crisis, credit crunch and the consequences of excessive borrowing by governments and consumers alike, Australia benefitted from its mining boom, strong trade links with fast-growing economies in the Asia-Pacific region and a tighter monetary policy at home than that pursued by other central banks.
Another factor has also contributed to economic growth - a rapid rise in population. Around half of the recent increase in GDP can be attributed to the growing number of consumers. This means that in real terms the wealth of the average person has risen by less than might have been hoped, but it also means demand for homes has been elevated.
If this trend continues, investors may find property is an excellent way of investing in a growing economy, as demand for it should continue to soar in the years ahead. While the level of growth and modest impact on consumer purchasing power means it would be an exaggeration to describe Australia's growth as an 'economic miracle', the fact that the country has done so much better than other established leading economies around the globe cannot be ignored.