Yesterday’s National Accounts data confirmed Queensland’s economy was sluggish in 2010, as reported in this morning’s Courier-Mail (Queensland’s slowing economy further affected by Summer disasters):

QUEENSLAND was the nation’s slowest growing state last year, even before the worst of the summer disasters hit.

While the state was starting to turn the corner in the last three months of 2010, economists now warn there is much worse to come.

Treasurer Wayne Swan warned Queenslanders to brace for a major economic blow.

The summer of wild weather could drag the country backwards in the March quarter, he said. But economists are predicting a swift recovery later this year in a move that raises fears interest rates will rise.

Despite the impact of the floods and Cyclone Yasi, economists are, rightly in my view, forecasting a recovery later in the year. They have good reasons to do so, particularly given the big pipeline of mining investment, as noted in this previous post:

Post flood Brisbane economy sluggish, but should pick up soon

Another reason for us not to worry about the National Accounts is that the big increases in commodity prices Australia has benefitted from recently mean we can earn higher incomes even if production (which GDP is measuring) is lacklustre. Queensland Country Life (Commodity exports to soar) explains:

For farm products, the value of exports is forecast to rise by 4.4 per cent to $32.5 billion in 2011-12, following an expected increase of around 9 per cent to $31.2 billion in 2010-11.

Despite the adverse impact of recent excessive rainfall and floods, the forecast value of farm exports in 2010-11 represents an upward revision of around $1 billion from the forecast released by ABARES in December, mainly reflecting the effect of recent significant increases in agricultural prices on world markets.

Given the abundant reasons to be positive, it is disappointing the Courier-Mail chose to focus on the negative in yesterday’s National Accounts.