The surge in the terms of trade – export prices compared with import prices – pushed investment in the resources sector to a record high relative to the size of the economy.
“This peak was about eight per cent – nearly three times the size of the normal peak, and easily the biggest such surge for over a century,” he said in a speech in Perth on Friday.
“On other occasions, these types of events have ended up being very disruptive for the national economy.”
In the past, such booms have typically boosted inflation then, when commodity prices fell, ended with slowdowns or recessions, he said.
But that hasn’t happened this time.
“Inflationary pressure was relatively contained on the way up, and while aggregate growth has been a little disappointing for the past couple of years, in the circumstances we face – including very difficult global conditions in the aftermath of the financial crisis – the outcomes are, I think, quite respectable,” Stevens said.
While this episode was not yet complete, he said the economy overall has been recording growth.
As Stevens was delivering his speech, the Australian Bureau of Statistics released data showing gross domestic product grew by 0.9 per cent in the September quarter.
That quarterly rise, the strongest for three-and-a-half years, lifted annual GDP growth to 2.5 per cent.
That was faster than the 1.9 per cent expansion over the year to the June quarter, but exactly in line with growth over the preceding year and below the 3.0 per cent average for the decade ahead of the mid-2012 peak in resource investment.
“Looking ahead, nationally, the outlook appears to be for a continuation of moderate growth,” Stevens said.
He pointed to recent RBA forecasts that GDP would grow by two to three per cent over the year to mid-2016, and then to “pick up a bit” over the following year.
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