Australia Upgrades Spending Plans to Economic Recovery

The business investment in Australia soared in the second quarter while companies updated their business plan for next year considering the much-anticipated recovery other than the mining industry. Expenditures on machinery, plants, and equipment contributed to the economic growth as it peaked 2.7 percent for the second quarter.

Seasonally adjusted Investments rose to 0.8 percent worth A$28.3 billion or $22.37 billion for the months of April to June as stated in the Australian Bureau of Statistics (ABS) on Thursday. This has exceeded the forecast of 0.3 percent returns.

Reports are anticipated to gain A$1.7 trillion of gross domestic product (GDP) rose by 0.7 percent that has significantly increased by 0.3 percent in the first quarter. This year, the business investment has abruptly increased up to A$101.8 billion until June 2018 compared to the previous A$85.4 billion. Spending plans for sectors that include construction, utilities, and trades in retail, were operating at record highs.

The RBA governor Philip Lowe mentioned that the sluggish Australian economy from the mining industry is about to end and further easing of rates would worsen the debt-ridden bubble in the housing market of Australia. Hence, the RBA is open to maintain the interest rate a record low of 1.50 percent since August 2016 with a positive outlook that the economic growth will advance close to 3 percent.