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Australias economy slows as private investment weakens
The economy expanded by 0.3 percent in the three months to September, down from 0.5 percent in the previous quarter, to take the annual rate of growth to 2.7 percent, the Australian Bureau of Statistics said. The new readings were well below analysts' forecasts of 0.7 percent quarterly growth for a year-on-year rate of 3.1 percent, and sent the Australian dollar plunging third-quarters of a cent. "There's always two sides to a boom," JP Morgan economist Tom Kennedy told AFP. Net exports supported growth, expanding by a seasonally adjusted 0.8 percentage points as consumption spending rose by 0.4 percentage points. Private capital spending slipped by 0.5 percentage points and public investment eased by 0.2 percentage points. Australia's economy is transitioning towards non-resources driven growth, supported by the Reserve Bank's decision to keep interest rates at a record low of 2.5 percent amid an expected sharp fall-off in mining investment next year. The mining investment boom has helped keep the economy out of recession for more than two decades, but as business spending declines, growth has slipped below trend while the unemployment rate has edged up to a decade high of more than 6.0 percent. Sharp falls in commodity prices have also hit the economy, with the data showing a 3.5 percent decline in the terms of trade and real gross domestic income falling by 0.4 percent.

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