WA economy grows twice as fast as China s
WA economy grows twice as fast as China's

WA's economy is growing almost twice as fast as China's, according to figures that highlight the enormity of the resources boom.

The latest national accounts not only confirm that Australia is the world's miracle economy but shows WA grew 7.8 per cent in just the first three months of the year - almost equal to China's annual growth rate of 8.1 per cent.

In the 12 months to March, WA grew an astonishing 14.5 per cent, cementing the State's place as Australia's economic powerhouse.

WA's economic figures would have been even stronger had it not been for Cyclone Heidi, which temporarily shut iron ore exports from the Pilbara in January.

Australia's economy grew 4.3 per cent in the 12 months to March, including a seasonally adjusted 1.3 per cent in the March quarter.

Coming the day after the Reserve Bank cut the official cash rate by 25 basis points, the GDP figures took economists by surprise, being well above market expectations.

Treasurer Wayne Swan said all Australians should be brimming with pride over the figures, declaring they should silence the "doomsayers" talking down the economy.

"These figures send the loudest possible message to the world that Australia is the strongest performing developed economy bar none," he said. Shadow treasurer Joe Hockey conceded the figures were extraordinary but gave the Government no credit.

"Imagine what we could do as a nation if we had a decent Government," he said.

Deloitte Access Economics director Chris Richardson said WA never looked so much like China in its economic fundamentals, with its stunning pace of growth based on heavy construction.

"WA has what China needs," he said. "WA's economy is the perfect complement to China's.

"But, like China, you have your own two-speed economy. There are people on the wrong side of the boom in WA, like China, evident in skills shortages, wage growth and delivery delays."

The robust GDP result was attributed to higher household spending and the continuing strength of mining-related investment.

Household spending rose 1.6 per cent for the quarter, with services and dining out making a bigger contribution as traditional bricks and mortar retail stores still do it tough.

Despite increasing spending, households managed to maintain a high savings rating, putting away 9.3 per cent of their pay packet, indicating incomes grew strongly.

But housing and construction continued to struggle.

The West Australian

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