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Aust's economy better than others

Wayne Swan.
Wayne Swan. John Gass

AMID calls for the Reserve Bank to again lower the nation's cash rate, Treasurer Wayne Swan said the contrast could not be stronger between Australia's economy and foreign nations on Wednesday.

The Australian Bureau of Statistics released the latest inflation data on Wednesday, revealing an annual inflation rate of 1.2% and a June quarter cpi rise of 0.5%.

Economists, construction and industry groups responded immediately, calling for the RBA to lower its cash rate again, after five falls since November last year.

While many Australians may not feel the benefits in their hip-pockets, several indicators show Australia's economy performing relatively better than our foreign counterparts.

And the data saw Mr Swan and RBA Governor Glenn Stevens both trumpeting the strengths of the nation's economy within two days of each other this week.

Mr Swan told reporters on Wednesday a trifecta of indicators - low unemployment, low interest rates and contained inflation - was a sure sign of the strength of the domestic economy.

His words came a day after Mr Stevens told a Sydney conference that the economic strength was not simply down to luck.

Mr Stevens said while China's growth was moderating, it hadn't collapsed, housing price rises had slowed but the bottom had not fallen out of the market and housing affordability had "improved significantly".

"Some of the adjustments we have been seeing, as awkward as they might seem, are actually strengthening resilience to possible future shocks," he said.

"Higher - more normal - rates of household saving, a more sober attitude towards debt, a re-orientation of banks' funding, and a period of dwelling prices not moving much, come into this category."

The biggest price rises revealed in consumer price index data released on Wednesday were found in medical and hospital services (up 2.8%), rents (up 1.1%), vegetables (up 5.2%) and furniture (up 4.5%).

The biggest falls were found in domestic holiday and travel (down 4.4%), audio, visual and IT equipment (down 3.8%) and cakes and biscuits (down 2.8%).

Price rises

  •  Medical and hospital services - up 2.8%
  •  Rents - up 1.1%
  •  Vegetables - up 5.2%
  •  Furniture - up 4.5%.

Price drops

  •  Domestic holiday and travel - down 4.4%
  •  Audio, visual and IT equipment - down 3.8%
  •  Cakes and biscuits - down 2.8%.

Topics:  cash rate economy glenn stevens rba wayne swan


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