The treasurer Mr Wayne Swan before a government report on GDP this week said that growth in Australia, the world's biggest exporter of iron ore and coal, may have slowed last quarter as commodity prices fell.
Mr Swan said that "We shouldn't be surprised to see growth moderate from its above trend pace in the H1 of the year given the impact of difficult global conditions and the sharp decline in commodity prices."
He said that a high local currency and consumers putting off purchases have also pressured parts of the economy.
According to the median estimate of 25 economists surveyed, GDP probably expanded 3.1% in the three months to September 30th from a year earlier.
Iron ore prices plunged to a 3 year low in September, crimping export returns after waning demand from China, Australia's biggest trading partner.
He said that "Despite the challenges, it's important to remember our economy remains resilient. The pipeline of investment along with our low unemployment, contained inflation and lower interest rates provides a rock solid foundation for our economy in the face of continuing global headwinds."
According to a report from the Bureau of Resources and Energy Economics, Australia has benefited from a Chinese led commodity demand surge that has helped to galvanize the nation's economy during a global slowdown. While commodity prices have retreated from all time highs, the value of committed resource projects has increased to a record of AUD 268 billion.
Investment in mining and energy industries is offsetting Australia's manufacturers and retailers, which are battling headwinds of an elevated Australian dollar and restrained consumer spending.
The currency has advanced 16.2% against the US dollar since the end of 2009, making it the biggest gainer among the Group of 10 countries tracked by Bloomberg.
The Reserve Bank of Australia meets tomorrow to decide interest rate policy and 19 of 28 economists surveyed by Bloomberg predicted a 0.25% point reduction in the overnight cash rate target to 3%.
