Has Australia Dodged the Global Slowdown?

Australia is in the global economic spotlight today, as the land down under reported surprising GDP growth last quarter. Aussie number crunchers say GDP expanded 0.4% in the first quarter of 2009 — not exactly a booming economy, but far better than any of its Anglo counterparts.

“That means that technically,” Dan Denning reports from Melbourne, “Australia hasn’t had two consecutive quarters of ‘negative growth’ and isn’t in a recession. That’s if you accept the technical definition of recessions, or if you’re a moron.

“The numbers show reduced imports because consumers are scared. They show statistically goosed exports, which predict lower commodity prices, and therefore higher export volumes. And they show the biggest contraction in business capital and machinery outlays since 1991.

“In summary: To celebrate the GDP figure as a triumph of government policy is to shout your economic ignorance from the rooftops of the world. Sure, there are items to be positive about, especially exports. But the idea that government spending has somehow spared Australia from the long-term consequences of debt and leverage is beyond absurd. If this isn’t an old-fashioned recession, it’s a diet chocolate recession, in which the short-term benefits of consumption belie the long-term consequences of debt.”

The Daily Reckoning