Relief for businesses as Australian economy expands

Struggling companies throughout Australia can breathe a small sigh of relief as new figures showed the economy is in better shape than many people had originally thought.

The Australian Bureau of Statistics has confirmed that the nation's gross domestic product grew by 1.3 per cent in the first quarter of 2012, which followed on from a revised increase of 0.6 per cent in the previous three-month period.

This is encouraging news for firms across the country, especially at a time when many economists had been predicting doom and gloom.

News of the upturn may also encourage more organisations to take out business loans in order to expand.

Banks provide essential funding to upstart companies, but a lot of enterprises have been wary of taking on extra debt while the economy has been so shaky.

"It does tell you we had a decent amount of momentum in the run up to the latest round of the European woes, and it's not a bad place to be in," commented chief economist at the Commonwealth Bank of Australia Michael Blythe.

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