Natural disasters, both at home and abroad, are believed to be the cause of reduction in Australia’s first-quarter GDP, even more than it was expected. Ahead of this week’s release of first quarter GDP figures, Treasurer Wayne Swan, has said that Wednesday’s national accounts will show the terrible hit that Australia has suffered from the floods and Cyclone Yasi on its land and also from disasters in Japan, which is Australia’s second largest trading partner. Swan has added that the treasury’s estimates were that these three events were likely to have subtracted more than 1 percentage point from growth in the quarter.

However, it is also expected that as soon as the flood affected coal-sector turns normal, growth will gradually accelerate in the second quarter. In order to help Queensland recover from the flooding, Australia’s central bank has held the nation’s benchmark interest rate at 4.75 percent, untouched since November.

Queensland produces 80 percent of the country’s coking coal exported from the country. The organization for Economic Cooperation and Development said last week that as rebuilding gets under way and exports accelerate, Australia's economy will grow next year at the fastest speed among nations in the Group of 10 bloc of currencies.