Growth partly driven by return of students, tourists
Household consumption remains sudued, more weakness seen ahead
Productivity likely a challenge for RBA

SYDNEY, Sept 6 Reuters Australia39;s economy expanded by more than expected in the second quarter, driven by exports and investment, while household consumption remained weak as decadehigh interest rates worked to cool demand.

Data from the Australian Bureau of Statistics on Wednesday showed real gross domestic product GDP rose 0.4 in the second quarter, slightly beating forecasts of 0.3. That compared with an upwardly revised 0.4 growth in the first quarter.

Annual growth was at 2.1, above expectations for 1.8.

The world39;s 12th largest economy got a boost from net exports, with the return of students and tourists, and public investment. Taken together, they more than offset a significant drag from business inventories.

For all its challenges, the Aussie economy remains remarkably resilient, said Harry Murphy Cruise, an economist at Moody39;s Analytics.

Looking ahead, growth will be weak… Household budgets will remain under pressure. Government consumption will also moderate from its elevated levels, and business investment will ease on the back of squeezed profits.

Household consumption, which used to be the engine of growth, remained subdued with just a 0.1 gain in the quarter due to spending on essential goods and services.

Consumers continued to save less in the face of high costs of living and…