By Mark Mulligan
Australia's first-quarter gross domestic product growth looks set to come in slightly higher than expected on Wednesday, following a surprisingly strong contribution from net exports.
The Australian Bureau of Statistics said on Tuesday that exports of goods and services slipped 1 per cent in the first three months of the year, while imports dropped 4 per cent.
Economy well afloat. Net exports contributed much more than expected to GDP.Credit: Fairfax Media
This left the trade surplus up 60 per cent at $12.6 billion, which will translate to a 1.1 percentage point contribution to GDP, the ABS said.
Economists had expected net exports to contribute 0.7 percentage points.
The Australian dollar immediately reacted, surging about half a US cent, to US72.36¢.
The better-than-expected result is likely to have pushed up the rate of quarterly growth beyond the 0.6 per cent average estimate in a Bloomberg survey of economists. This would leave year-on-year growth at or above 2.7 per cent.
This is despite a weaker-than-expected contribution from corporate profits, which was offset with better inventories.
Public sector demand and investment rose only modestly in the quarter, in line with expectations.