Post-boom Australian economy "respectable": central banker

Australia has done well to avoid the disruption on the national economy by the ending of commodity price booms, according to Australia's top central banker.

Typical booms have usually boosted inflation then, when commodity prices fell, ended with major slowdowns or recessions, this hasn't happened in Australia "on this occasion," Reserve Bank of Australia (RBA) Governor Glenn Stevens said in a speech to the Australia-Israel Chamber of Commerce on Wednesday.

Inflationary pressure was contained during Australia's boom cycle, and while an aggregate growth has been "a little disappointing" in the post-global financial crisis conditions Australia faces, this outcome is "quite respectable," Stevens said.

Regulatory measures, re-deployment of capital and labor as well as Australia's flexible and tested macroeconomic policies are "part of what helped the economy through the commodity super cycle without seriously inflating or crashing."

While this episode was not yet complete, Stevens said the economy overall has been recording growth.

While Stevens was delivering his speech, official figures released by the Australian Bureau of Statistics showed Australia's economy grew by 0.9 percent over the September quarter, 2.5 percent year-on-year, bouncing back from its June quarter low of 0.2 percent.

The third quarter result, the strongest for three-and-a-half years, beat market consensus of 0.8 percent quarter-on-quarter growth and was above the Reserve bank of Australia's 0.6 percent projection.

AMP Capital chief economist Shane Oliver however believes the third quarter growth is "payback" for the previous quarter's weakness.

"Average of the two is 0.6 percent quarter-on-quarter, which is probably a better guide," Oliver said, though noted the September quarter result is stronger than it looks as net exports contributed 1.5 percentage points to year-on-year growth.

Australia's economy has been undergoing one of its most significant transitions as the commodities boom comes to a halt, helped by a low Australian dollar and strengthening business and consumer sentiment, tailoring exports to capitalize on the Asian middle class and increasing domestic consumption.

"That means demand for services as well as for energy and agriculture production," Stevens said.

Australian Treasurer Scott Morrison told reporters in Canberra the key drivers of the September's growth -- net exports, household consumption and housing construction -- are "signs that our economy is heading in the right direction."

"The transition process is underway," Morrison said.

However underlying growth is still sub-par as falls in business investment, down 4.2 percent, and public spending, down 1.2 percent, were only partially offset by a 2-percent increase in housing and 0.7 percent increase in consumer spending, Oliver said.

"That said, it's still motoring along and a long way from the recession many saw as inevitable," Oliver said.

Stevens said the outlook nationally "appears to be for a continuation of moderate growth", pointing to RBA forecasts of 2 to 3 percent GDP growth over the year to mid-2016, and then "pick up a bit" over the following year. Endit