(Updates with minister’s comment in second paragraph.)
Sept. 4 (Bloomberg) -- Australia economy, particularly industries such as manufacturing and retailing, are under pressure as households restrict spending and the high currency curbs returns from exports, Treasurer Wayne Swan said.
“There’s no doubt there are pressures in our economy,” Swan said today in his weekly economic note. “Many industries like manufacturing and retailing are doing it tough as they battle with cautious household spending and a high Australian dollar.”
Swan is waiting for second-quarter gross domestic product figures on Sept. 7 to show the economy resumed its expansion after a 1.2 percent contraction in the first three months of the year as flooded coal mines, railways and farmland hurt exports. GDP probably grew 1 percent, according to the median forecast in a Bloomberg News survey of 23 economists.
“It’s taken longer than expected to get coal production back up and running, but we have seen a recovery in exports in recent months,” Swan said.
Reports last week showed retail sales advanced for the first time in three months in July and mining projects boosted second-quarter business investment.
Australia’s dollar has gained 17 percent against the U.S, currency the past year, which is hampering exports outside the resources industry where demand from China and other Asian nations has bolstered prices.
Swan’s comments echo the Reserve Bank of Australia which said Aug. 5 in industries other than mining and related sectors “the high exchange rate and subdued levels of retail spending mean that the trading environment is likely to remain difficult.”
Governor Glenn Stevens will keep the cash target unchanged at 4.75 percent on Sept. 6 according to all 25 economists in a Bloomberg News survey.
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