WEEKEND ECONOMIST: Rates reticence

Recent data provide further evidence of a major challenge for the Australian economy, which should ensure that interest rates don't move much at all this year.

On Wednesday, Australia's National Accounts for the December quarter were released. They showed the economy finished 2010 on a mixed note. In the quarter, the Australian economy grew by 0.7 per cent/quarter, 2.7 per cent/year, in the fourth quarter.

Domestic demand growth was only 0.3 per cent in the quarter, with consumer spending 0.4 per cent, housing -0.4 per cent, business investment 0.5 per cent and public demand increasing by 0.7 per cent.

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