Australia cuts growth forecast

The Reserve Bank of Australia (RBA) has slashed its growth forecast after flood and cyclone disaster damaged the economy.

The economy, dubbed the “wonder from down under” has recently experienced a slowdown after the disasters led to a fall in coal and agricultural exports and resulted in the economy contracting in the first quarter – the largest contraction since 1991.

However, it is one of the few developed economies not to have fallen into recession like its counterparts throughout the world.

Meanwhile, the central bank now expects growth to be 3.25% in 2011 – much lower than an earlier estimate of 4.25%.

The revision comes shortly after it was revealed retail sales fell 0.1% in June on a monthly basis – the second consecutive monthly fall.

Furthermore, consumer confidence in the country has dived to “below-average levels”.

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