Australian economy grows 0.4% in Dec quarter

Australia's mining-driven economy slowed in the December quarter, growing just 0.4 percent as investment stalled and export prices slumped, according to the latest data. The Australian Bureau of Statistics (ABS) said gross domestic product expanded by 0.4 percent in the three months to December, half the revised 0.8 percent growth seen in the previous quarter. On-year growth was 2.3 percent. Economists had expected quarterly growth of 0.8 percent and a yearly figure of 2.4 percent. Solid consumer spending was offset by slumps in business and dwelling investment, while Australia's terms of trade -- the value of its exports against its imports -- fell 4.7 percent. It was the measure's first drop since September 2009, according to the ABS, following an easing in commodity prices as global demand slowed. "This was reflected in real gross domestic income, which declined 0.6 percent in seasonally adjusted terms for the quarter," the ABS said. The Australian dollar dived to a six-week low of US$1.0524 on the data which was seen as increasing the chances of an interest rate cut in the near-term. It had been fetching $1.0572 immediately prior. Canberra expects growth of 3.25 percent for 2011-12, while the Reserve Bank of Australia slashed its GDP forecasts last month for the financial year to June 30 to 3.5 percent. The central bank has tipped 3.0-3.5 percent growth for calendar 2012.