Australian economy grows 0.6%

Australia's commodities-driven economy grew 0.6 percent in April-June and 2.6 percent on-year, data showed Wednesday, underscoring sluggishness as the Asia-led mining boom cools just days ahead of a general election. The Australian Bureau of Statistics figures compared with revised 0.5 percent growth for the previous quarter and was in line with analyst expectations. The year-on-year figure was better than market forecasts of 2.5 percent, seeing the Australian dollar bounce to 90.87 US cents from 90.50 cents prior to the release of the data. A 0.4 percent increase in consumer spending was a major driver of growth, helped by cuts in the official interest rate to an historic low of 2.5 percent. The ABS said the mining, financial and healthcare sectors had been the biggest contributors to Australia's gross domestic product over the past 12 months. Manufacturing, the coal-fired electricity industry, gas and waste services detracted from growth in real terms, the ABS said. Exports remained muted, with the terms of trade -- a measure of export prices versus import prices -- up just 0.1 percent in the quarter, compared with 3.1 percent in the first three months of 2013. Over the past 12 months, the ABS said the terms of trade had fallen 4.9 percent, reflecting drops in commodity prices as Asia -- particularly key trading partner China -- slows and Australia's decade-long resources investment boom begins to unwind. Australia's general election takes place on Saturday.