CANBERRA - The Australian economy barely grew in the three months to September, backing the Reserve Bank's decision to slash interest rates.
Economic growth crawled to its slowest pace in eight years, rising by just a seasonally-adjusted 0.1 per cent in the September quarter, even weaker than the
slim 0.2 per cent increase economists had expected.
Gross domestic product (GDP) in the September quarter national accounts released today showed annual growth was 1.9 per cent.
Consumer spending was mediocre during the quarter on the back of 12-year high interest rates earlier in the year.
The RBA has since slashed interest rates in the face of a global economic slump, cutting the cash rate by 300 basis points to 4.25 per cent in the space of four months.
Economists expect the Australian central bank to follow up Tuesday's one percentage point rate cut with a further reduction in February.
Financial markets are pricing in a cash rate trough of below three per cent by mid-2009.
- AAP
