Australian workers are pictured on the streets of Sydney, September 3, 2014. Australia's economy slowed last quarter as cautious consumers curbed spending and the country imported more, though the result was better than many had feared - and still ahead of most of its rich-world peers.

Sydney - Australia's economy lost pace in the second-quarter of 2014 after a sharp fall in exports saw growth expand by just 0.5 percent following a strong start to the year, data showed Wednesday.

Annual growth was 3.1 percent, figures from the Australian Bureau of Statistics said, compared to a year-on-year expansion of 3.5 percent in the first-quarter.

Growth had soared to 1.1 percent in the three months to March.

Analysts had expected a slightly softer reading of 0.4 percent for the second-quarter to take growth for the year-to-date to 3.0


The Australian dollar broadly looked through the data, remaining below 93 US cents despite edging up slightly.

The slower growth rate was mostly driven by a fall in net exports, which declined by a seasonally adjusted 0.9 percentage points in the three months to June.

Inventories supported growth in the quarter, adding 0.9 percentage points, while final consumption contributed 0.3 percentage points.

The softer figures had been flagged by the Reserve Bank of Australia, which on Tuesday decided to keep the cash rate on hold at a record low of 2.5 percent for its 12th-straight meeting.

The central bank has sought to maintain an accommodative monetary policy as the country moves away from a mining investment boom that has helped the economy avoid recession for more than two decades. - Sapa-AFP