Australia posts second-quarter growth of 2.1%, beating expectations

Australia's economy grew at an annual rate of 2.1% in the second quarter, surpassing expectations of 1.8%. This positive surprise comes after a weak first quarter, and suggests that the country's economy may be more resilient than previously thought. The growth was driven by a rebound in household spending and a surge in public investment.

This better-than-expected growth may have implications for the Reserve Bank of Australia's (RBA) monetary policy stance. The RBA has been keeping interest rates on hold, waiting for more signs of sustainable growth before making any changes. A strong growth reading could reduce the pressure on the RBA to cut interest rates, which could in turn support the Australian dollar. However, it's worth noting that the economy is still growing below its long-term average, and there are potential risks on the horizon, such as a slowdown in global trade.

Looking ahead, fund managers will be watching to see if this growth momentum can be sustained. Key indicators to watch include the upcoming jobs report and inflation data, which will provide more insight into the economy's trajectory. Additionally, the Australian government's budget announcement later this year will be closely watched for any policy changes that could impact the economy. Overall, the positive growth surprise is a welcome sign for Australian fund managers, but it's too early to say if it's a sustainable trend.

Originally reported by cnbc.com. FundNews adds analysis for finance & markets readers.