Australia's economy is expected to grow below-trend this year, before picking up next year as the non-mining sectors fill the gap left by the fall-off in mining investment. In November, the RBA cuts its growth forecasts for this year to 2.5 per cent. It expects resources investment to drop off at a faster-than-expected pace, for the federal and state governments to remain restrained in their spending, and for the Australian dollar to remain at elevated levels. The chart also shows that Australia has not fallen into recession (two quarters of negative growth) for more than two decades. Photo: RBA One of the key factors behind the strength of the Australian dollar has been sharp rise in commodity prices. Commodity prices have been driven up by emerging economies such as Brazil, India and China, Australia's biggest trading partner. While commodity prices have slipped over the past two years, as the chart shows, they are still at very high levels. (Austr...
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