CANBERRA: Australia's economy grew at a faster pace in the last three months of 2006 than expected though the country was hit by a worst ever drought and a resulting decline in rural exports, according to the Australian Bureau of Statistics.
Gross domestic product (GDP) grew by a seasonally adjusted 1 per cent during the quarter, taking the growth for the full year to 2.8 per cent, the bureau said. GDP growth in the third quarter had been 0.3 per cent.
Economists had predicted a 0.6 per cent growth in GDP during the quarter and an annual growth of 2 per cent.
The bureau's figures also showed that income-based measure of GDP had gone up 1.1 per cent during the quarter and 2.7 per cent during the year. The production-based measure of GDP rose 1.3 per cent in the quarter and 3.4 per cent for the year.
The bureau said gross national expenditure rose 1.9 per cent compared to the third quarter and 3.5 per cent from the year-earlier quarter.
The rural sector, however, remained affected, mostly by the drought. Farm production declined 11.2 per cent during the quarter and 22.8 per cent over the year.
Treasurer Peter Costello said the drought, the worst in a century, had weighed heavily on the farming sector and the sector would continue to be a drag on the economy.
Prime minister John Howard said the figures offered indication of the strong economic management of the country in spite of the ravages of the drought.
The Reserve Bank of Australia had increased interest rates three times during the year to 6.25 per cent.
