Read this in bloomberg today and I thought I would post this here.
Australia’s Economy Shrinks Most in 20 Years as Floods Hurt Coal Exports
By Michael Heath - Jun 1, 2011 11:43 AM GMT+0500
Australia’s economy shrank in the first quarter by the most in 20 years as floods hurt exports, even as stronger business investment underscored the central bank’s forecast for a rebound in the second half of the year.
Gross domestic product fell 1.2 percent from the previous three months, when it rose a revised 0.8 percent, the Bureau of Statistics said in Sydney today. Exports slumped 8.7 percent, subtracting 2.1 percentage points from GDP growth, today’s report showed, while machinery and equipment spending jumped 6 percent, adding 0.4 point.
The nation’s dollar rose after the report showed the contraction was smaller than a drop of as much as 2 percent that economists including Goldman Sachs & Partners Australia Pty had forecast. While Reserve Bank of Australia Governor Glenn Stevens has held interest rates at 4.75 percent for the past five meetings to help Queensland state recover, investors today boosted bets he’ll raise borrowing costs by August.
“The market was braced for a really big negative so it’s a bit of a relief,†said Su-Lin Ong, senior economist at RBC Capital Markets in Sydney. “The report looks mostly to be reflecting the impact of the Queensland floods on exports; outside of exports, domestic demand is actually pretty resilient.â€
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Still there will be the people who claim that Global Warming is not effecting us at all