Australia's economy shrank 1.2 percent in the first quarter, its biggest decline in 20 years, after extensive flooding hit coal exports, but a once-in-a-lifetime mining boom is expected to help growth bounce back quickly this year.
Annual growth in gross domestic product (GDP) slowed to a tepid 1.0 percent in the quarter, down sharply from 2.7 percent in the fourth quarter of 2010, data showed on Wednesday.
The results were in line with a Reuters poll on Tuesday after a report showed net exports subtracted a record 2.4 percentage points from growth. Damage from the flooding and Cyclone Yasi came at a time when rising utility and fuel prices were already crimping household spending and a strong local dollar was taking a toll on trade-exposed industries such as manufacturing and tourism.
Add to that the impact of earthquakes in Japan and New Zealand, the nation's major trading partners, and it was not surprising to see the economy going into reverse gear.
The data showed the real value of goods and services produced amounted to A$1.3 trillion for the year to March, or A$58,091 for every man, woman and child in the nation of 22.6 million.
The Australian dollar rose nearly half a cent to $1.0737, relieved the contraction was not as dire as some had predicted. However, it remained well below a 29-year peak of $1.1012 set a month ago.
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