Treasurer Wayne Swan ahead of a government report on gross domestic product said that natural disasters in Australia probably cut more than 1 percentage point from economic growth in the first quarter,

Mr Swan said in a weekly economic note said that the June 1 report from the Bureau of Statistics likely will show a “dramatic hit” from floods and a cyclone in Queensland state, and an earthquake and tsunami March 11 in Japan.

Mr Swan’s latest estimate was higher than one he made in April that put damage to GDP in the first quarter at 0.75 percentage point. The median estimate in a Bloomberg News survey of 23 economists is for a 0.3 percent first-quarter contraction from the final three months of 2010.

He said that “No matter the outcome on Wednesday, the encouraging medium term picture for our economy doesn’t change our task ahead. Our fundamentals are strong and our prospects are bright.”

The total economic cost of the disasters is likely to be about AUD 9 billion with more than half the estimated AUD 6 billion impact to coal production showing up in the March quarter.

Australia’s central bank has held the nation’s benchmark interest rate unchanged at 4.75% since November to allow Queensland, which produces 80% of the coking coal exported from the country, to recover from the flooding.

He added that “The size of that loss isn’t surprising when you consider that 85% of Queensland’s 57 coal mines suffered production losses in the early part of the year.”

(Sourced from Bloomberg)