Not a good week for Australian economy, with growth prospects downgraded. However Australian dollar exchange rate fared well against sterling.
Here is economics commentator Peter Lavelle's report for this week - 22.07.2011.
Sterling has lost almost 1.0% against the Australian dollar in the last week, in spite of a raft of pessimistic data from Australia.
First up, leading bank Westpac cut its growth prospects for Australia to just 1.6%, compared to 2.2% back in April. This reflects a slowdown in consumer spending and the slow recovery of the coal mining industry, following floods in Queensland earlier in 2011.
Chief economist at Westpac Bill Evans said regarding the data: "The growth rate in the index has steadily fallen from its peak in this cycle of 9.5% in March 2010. This is now the lowest growth rate for the index since September 2009."
Second of all, the Australian Treasury warned that the country's dependence on China could become a problem as its economy overheats.
Australia has benefited from Chinese demand for commodities, prompting the biggest mining boom in Australia's history. However, as inflation soars in China and its economy begins to overheat, there is a chance it could drag Australia down with it.
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