THE NEWS WRAP: Economists say economy growing despite mining slowdown

The Australian economy is still strong, despite a slowdown in the mining sector, and is set to post healthy quarterly GDP growth figures this week, according to a group of leading economists.

A survey of 15 economists by AAP found that they feel the size of the economy to have grown by 0.8% in the June quarter, following on from a 1.4% rise in GDP in the first three months of the year.

BCA backs state GST revamp

Business Council of Australia has backed calls for an overhaul of state-based finances, supporting the idea that GST should be distributed based on population size.

Conservative-led states Victoria, NSW, Western Australia and Queensland are pushing for a change to the GST system that will see them get more GST based on population share, rather than rely on revenue raised through various other state-based taxes, many of which impact small businesses.

EU credit rating warning

Credit agency Moody’s has downgraded the European Union’s outlook to “negative”, sparking fears that the bloc may be downgraded.

Moody’s warned that if the debt crisis lowered the credit rating of one of Europe’s major players – such as Germany or the UK – the continent’s AAA rating would be at risk.

Overnight

The Dow Jones Industrial Average was down 54.90 points, or 0.42%, to 13,035.94. The Australian dollar fell to US102.25 cents.