The ASX 200 was up by 75.20 on Wednesday. It recorded a 1.05% increase and was at 7,217.80. This was after Australia’s economic data released on Tuesday showed better than expected results.
Australia’s Data Outlook
The ASX 200 reacted to the country’s strong economic data released on Tuesday. According to the Australian Bureau of Statistics (ABS), Australia’s economy expanded by a real 1.8% in three months to March. Economists in a Reuters poll had forecast a 1.5% rise.
The county’s first quarter economic expansion was led by private investment which contributed 0.9% to the economic growth. Machinery and equipment investment hit its strongest quarterly high since December 2009. Annual output rose 1.1% to a A$525.7 billion from last year’s low of A$468.3 billion. Michael Smedes, head of national accounts at the Australian Bureau of Statistics, stated that:
“With 1.8% growth in the March quarter 2021, Australian economic activity has recovered to be above pre-pandemic levels and has grown 1.1% through the year.”
The Australian dollar is currently at $0.7755 which is stronger than $0.772 which was seen earlier this week.
Australia is among the very few countries that have recorded a larger economic growth than before the pandemic. Australia announced strict social distancing rules in late March to help curb the spread of the corona virus. This led to the closure of businesses such as retail shops, restaurants, and cafes. It also led many citizens to queue up for welfare payments.
Australia’s employment rate is higher than before the pandemic. Underemployment and unemployment measures have rapidly dropped. The country’s central bank believes that this may spark wage pressures despite being above levels.
The Reserve Bank of Australia (RBA) has reiterated it will not raise the cash rate from its 0.1% record until inflation is within its 2-3% target band. This will happen if the wage growth doubles to at least 3%. The jobless rate will have to slip below 4% from the current 5.6%. the RBA thinks that this is unlikely to happen before 2024.
ASX 200 Movers
Miners are among the best performers in the ASX 200 index. Amani Gold is the best performer in the index. Other top performers include Auckland International Airport, Classic Minerals Ltd, among others.
On the flipside, companies like Environmental Clean, Cycliq, Analytica Ltd, among others have lagged.