Australia's economic growth slowed slightly last quarter, with the economy growing 3.1 per cent in the year to September.
The official Bureau of Statistics figures show growth for the September quarter came in at a sluggish 0.5 per cent, seasonally adjusted, down from 0.6 per cent in the June quarter.
The annual pace of economic growth also slowed to 3.1 per cent, down from 3.7 per cent in the June quarter.
However, if Australia's economy kept tracking at its September quarter pace, it would only grow 2 per cent over the next year, well below average levels which are seen to be around 3.25 per cent.
The Bureau says growth for the quarter was driven by a 0.5 percentage point contribution from private business investment, 0.3 percentage points from rising inventories, and a 0.2 percentage point addition from household consumption.
The ABS says a fall in public investment (such as government infrastructure spending) took 0.5 percentage points away from the final growth figure.
Mining (0.4 percentage points), manufacturing and health (both 0.1 percentage point) were the industries that contributed to economic growth last quarter.
HSBC Australia's chief economist Paul Bloxham says mining investment was still adding to growth last quarter, but may not be for too much longer.
"The composition looks very similar to what we had in mind, which is a strong contribution from mining investment growth," he said.
"[It] looks still to be fairly uneven across the economy - household consumption was still quite weak, so the mining story is still supporting growth in the third quarter of this year." Australia's terms of trade - the price the nation receives for its exports, relative to the cost of its imports - slipped 4 per cent in the September quarter, as commodity prices fell.
The annual figure came in right on average economist forecasts, while the quarterly number was just a touch lower, meaning the Australian dollar remained virtually unchanged at 104.75 US just after the data were released at 11:30am (AEDT).
Treasurer Wayne Swan says the growth figures show the ongoing resilience of the economy in the face of a difficult and volatile world environment.
He says there is solid growth and low unemployment and strong investment while inflation is contained and interest rates are low.
Mr Swan says the figures also reveal there has been $1 trillion of business investment in the economy since the Government came to office.
"And what I'd say about that is that this is a resounding vote of confidence in the country given one of the most turbulent periods we've seen in the global economy in nearly 80 years," he said.
JP Morgan's chief economist Stephen Walters says the figures were basically a pass mark for Australia's economy.
"It was okay - it could have been a lot softer - but the mix of growth's not that great, with the public sector likely to remain quite a drag, the capital spending pipeline being worked off, and a lot of mining companies sitting there with a lot of unused inventory," he told Reuters.
"There's still a substantial amount of mining investment to be done, and the RBA's been cutting rates for more than a year now, so they will eventually get traction from that, so I think [the probability of a recession in Australia is] pretty low." But Opposition Treasury spokesman Joe Hockey says the figures reveal deep concerns about consumer and business confidence.
"With the introduction of the carbon tax, this is the slowest quarter of economic growth since the Queensland floods and outside of that since the global financial crisis," he said.
Business editor Peter Ryan told The World Today concerns about the surplus impact and the slower GDP could force the RBA's hand on interest rates.
Most economists say the Reserve Bank will have to cut interest rates further early next year if it wants to stop economic growth falling well below 3 per cent.
"The main point to note is that a 2 per cent annualised pace of growth is pretty lethargic for the Australian economy, and it's occurring before we're seeing the impact of falling mining investment, so that's a key risk as we move into 2013," Macquarie senior economist Brian Redican told Reuters.
"We still think the RBA needs to be much more aggressive in getting rates down, we think the cash rate will fall to 2 per cent by Q3 [the third quarter] next year."