Australia: Disasters to slash growth by 1%

The disasters led the treasury to downgrade growth forecast from 3.25 per cent to 2.25 per cent.

SYDNEY: The hit to exports as a result of Japan’s quake and tsunami, devastating floods in its own northeast and a rallying dollar have shaved one per cent off Australia’s growth forecasts, according to a report in The Age newspaper.

Accompanied by a slump in consumer spending, the disasters have led the treasury to downgrade growth forecast from the 3.25 per cent flagged in November’s budget update to 2.25 per cent.

The devastation and nuclear crisis in key trading partner Japan wiped 0.25 per cent from economic growth, with Australia’s summer of floods and cyclones delivering a 0.5 per cent hit. The Australian currency was also stronger than anticipated, impacting exporters and import-competing industries.

“With already patchy growth in some sectors, the impact could lead to flat or even negative growth in the quarter, although there is likely to be a rebound in the next quarter,” stated the report.



Published in The Express Tribune, April 17^th, 2011.