Australia economy slows in Q4 as headwinds mount

SYDNEY  – Australia’s economy grew at the weakest pace in a year last quarter as strength in trade was offset by rising interest rates and high inflation, and all the signs are a further slowdown lies ahead.

Data from the Australian Bureau of Statistics on Wednesday showed real gross domestic product (GDP) rose 0.5 percent in the December quarter, down from 0.7 percent in the previous quarter and under forecasts of 0.8 percent.

Annual growth was still solid at 2.7 percent, while the report contained plenty of evidence of cost and price pressures that underline the case for yet further increases in interest rates in the struggle against inflation.