Australia’s GDP expands unexpectedly in 1st Quarter, avoids recession.

The Australian economy grew in the first quarter of 2009 after decreasing for the first time in eight years in the fourth quarter of 2008 according to a release today by the Australian Bureau of Statistics. The GDP report showed that the Gross Domestic Product increased by 0.4 percent in the January to March quarter after declining by a revised 0.6 percent in the October to December 2008 quarter and averted a technical recession of two straight quarterly declines in GDP. The fourth quarter GDP was the lowest quarterly reading since the December of 2000 quarter when the GDP contracted by 0.8 percent. On an annual basis, the GDP also grew by 0.4 percent over the first quarter of 2008 following a revised annual growth rate of 0.8 percent in the fourth quarter.

Economic forecasts had expected that the GDP growth would fall by 0.2 percent for the first quarter and decline by 0.4 percent on an annual basis.

Contributing positively to the GDP increase for the quarter was an increase in exports by 0.6 percent while household consumption expenditure increased by 0.3 percent. Excluding the farming sector, the GDP increased by 0.5 percent for the first quarter.

Today’s GDP release comes a day after the Reserve Bank of Australia decided to hold its interest rate steady at 3.00 percent for the second consecutive month. The RBA had shaved off 4.25 percentage points from the official cash rate since September 2008 to help fight a slowing Australian economy amid the global economic slowdown.