Australia Economic Outlook
December 13, 2019Growth was lackluster in the third quarter, restrained by feeble private domestic spending. Falling mining and dwelling investment, despite a loose monetary policy stance, caused fixed investment to dip in the quarter, while meagre wage growth and a higher saving ratio offset recent tax cuts and translated into anemic consumer spending. On the other hand, the external sector continued to support growth, powered by strong commodity exports, which led to a wider current account surplus in the quarter. Turning to Q4, jobs shedding, feeble retail sales in October and downbeat consumer confidence throughout the quarter all point to subdued household spending, while business surveys signal only limited improvements. Meanwhile, at end-November, S&P Global Ratings warned additional fiscal stimulus, encouraged by the Central Bank’s governor, would jeopardize its AAA credit rating. That said, the country’s fiscal metrics remain quite solid.
Australia Economic GrowthActivity is set to strengthen in 2020, buoyed by sturdier domestic demand. Fixed investment should rebound, albeit timidly, as housing and mining investments recover, propped up by looser monetary conditions, improving business sentiment and a turnaround in the housing market, which should also buttress consumption. Weaker demand from China and lingering trade tensions cloud the outlook, however. FocusEconomics panelists expect GDP to expand 2.3% in 2020, which is down 0.1 percentage points from last month’s forecast. In 2021, growth is seen strengthening to 2.6%.
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Australia Economic News
January 23, 2020
Seasonally-adjusted employment rose by 28,900 in December, following a revised 38,500 job addition in November (previously reported: +39,900).
January 22, 2020
The Westpac-Melbourne Institute consumer sentiment index dropped to 93.4 in January, from 95.1 in December, against the backdrop of ongoing harsh wildfires around the country.
Australia: Pre-Christmas shopping and marketing promotions power sharpest jump in retail sales in two years
January 10, 2020
Nominal retail sales in November surged 0.9% over the previous month in seasonally-adjusted terms, following October’s 0.1% uptick and marking the strongest reading in two years.
December 19, 2019
Seasonally-adjusted employment jumped by 39,900 in November, following a revised 24,800 job shed in October (previously reported: -19,000).
December 12, 2019
The business confidence index produced by National Australia Bank (NAB) fell to plus 0.1 points in November, from plus 2.0 points in October.