Australian economy grows 0.6% in June quarter

Australia's mining-powered economy grew 0.6 percent in the three months to June, slightly below forecasts, and 3.7 percent from a year earlier, weighed by China's slowdown and European woes. The Australian Bureau of Statistics figure was less than half the upwardly revised 1.4 percent in the first quarter of 2012 and below analyst predictions of 0.8 percent. Year-on-year growth slowed from 4.3 percent in the March quarter to 3.7 percent for the 12 months to June 30, the ABS said, in line with market forecasts. Consumer spending was the main driver of quarterly growth, contributing 0.6 percentage points to gross domestic product, with net exports -- the value of shipments minus imports -- adding 0.3 points. The Australian dollar was little moved by the data, falling to US$1.0207 from $1.0210 prior to its release. Though exports were robust the ABS said the terms of trade fell 0.6 percent, reflecting a fall in the bullish Australian dollar and slump in commodity prices as Chinese growth slowed and Europe grappled with sovereign debt issues. The value of the key mining industry contracted 1.2 percent in the quarter, subtracting 0.1 percentage points from GDP growth, according to the ABS. RBC Capital Markets chief economist Su-Lin Ong said the data showed the best of Australia's growth for 2012 was now behind it, with headwinds to the mining industry growing significantly in recent weeks. "The more timely data tells us that momentum is waning in the third quarter and will continue to wane over the course of the second half of this year," said Ong. Canberra expects growth of 3.25 percent in 2012-13 while the Reserve Bank of Australia has tipped growth of between 2.5 and 3.5 percent and has forecast the mining boom to peak by 2014.