Australia’s strong economic growth, driven by commodity exports to China and other fast-growing economies, was underlined on Tuesday when interest rates were pushed to their highest in nearly 12 years in an effort to contain inflation.
The Reserve Bank of Australia’s 25 basis point rise in the benchmark cash rate to 7 per cent, the third rise in six months, comes as many developed nations are cutting rates as economies slow.
Australia, now in its 17th year of uninterrupted growth, is out of alignment with the US. Gross domestic product is forecast to grow more than 4 per cent this year, spurred by commodities sales and a rebound in agricultural exports.
Australia’s growing reliance on its nearest neighbours in Asia was emphasised on Tuesday in comments by Yang Jiechi, China’s foreign minister, who was visiting Canberra to mark the start of annual talks on regional strategic issues.
read more:Australia bucks world trend with rate rise
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