Australia’s economy grew more than expected in the first quarter, re-igniting concerns about inflation and increasing speculation about interest rate increases. The gross domestic product rose 0.6 percent in the first quarter from the last quarter of 2007, and 3.6 percent from the same period a year earlier, the Australian Bureau of Statistics said. Economists expected growth of 0.3 percent for the quarter and 2.9 percent for the year. Concerns about inflation have prompted the Reserve Bank of Australia to lift interest rates aggressively since mid-2007 to 7.25 percent, the highest level in more than a decade. Policymakers had hoped that the higher interest rates and a rising Australian dollar would cool the economy enough to ease inflation, but analysts said Wednesday’s data indicates the central bank’s plan may be off track.

Source: nytimes.com