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FXstreet.com (Barcelona) - Market participants heard from the RBA Governor in a wide-ranging speech last night how these current extended and exceptional terms of trade up-cycle (which has peaked, but remains high) had been such a "big deal" to the Australian economy. The resource investment boom, regional disparities, the rise in the Australian dollar, and structural change has all been different aspects of this cycle.

Today, the Statistician has released its fully articulated State Gross State Product (GSP, the state equivalent of national GDP) for 2011-12. This data complements the quarterly State Final Demand (SFD) figures that are released as part of the quarterly national accounts GDP reporting that cover only the spending side. State international trade is not estimated on a quarterly basis, but is an important driver of relative State economic performance at its broadest level. For example, that part of resource investment in WA or Queensland that is furnished by firms in other states helps to support growth in the slower growing states and cap supply difficulties and inflationary pressures from rapid project expansion.

"The results are relatively uncontroversial, but help to complete the picture. These data should be regarded as a broader and more authoritative guide to growth at a state and territory level. They portray quite clearly how faster spending growth in any state is partly satisfied by interstate suppliers, in part reflecting the different skills, products and services available elsewhere as well as the limits to growth determined by any State to grow in the short to medium term. A similar pattern is also evident at the national level where Australia's ability to supply is governed in part by potential growth, savings, the excess in demand satisfied from foreign suppliers." writes David de Garis, an Analyst at NAB.
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