ECONOMIC FORECASTING – AUSTRALIA

Steeled for ore fall budgetary blow

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Original article by Patrick Commins
The Australian – Page: 2 : 28-Sep-21

Chris Richardson of Deloitte Access Economics says the sharp fall in the iron ore price has major implications for the federal and Western Australian budgets. He says the 2021-22 budget forecasts of both governments may not have been conservative enough in the wake of the price crash. The fall in the iron ore price has been attributed to factors such as the Chinese government’s environmentally-driven restrictions on steel production and the financial problems of property developer Evergrande. Surging commodity prices saw overall tax revenue from the mining sector top $30bn in 2020-21, compared with just $12bn in 2015-16.

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DELOITTE ACCESS ECONOMICS PTY LTD

Hoarded cash to drive recovery

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Original article by Tom Dusevic
The Australian – Page: 1 & 6 : 22-Sep-21

The OECD now expects the Australian economy to grow by four per cent in 2021. The Paris-based organisation had previously forecast in May that the domestic economy would expand by 5.1 per cent in 2021 as it recovered from the COVID-19 pandemic. However, the Commonwealth Bank says economic activity will be boosted as households begin spending about $230bn worth of savings they have accumulated during the pandemic. The minutes of the Reserve Bank of Australia’s latest board meeting show that it is also upbeat about the long-term economic outlook, despite expectations that GDP will fall and unemployment will rise in the September quarter.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA

RBA: Economy to bounce back

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 8-Sep-21

Reserve Bank of Australia governor Philip Lowe has warned that GDP is likely to decline "materially" in the September quarter due to COVID-19 lockdowns. However, he believes that the economy will rebound as vaccination rates increase and restrictions are eased, and growth in the December quarter will allow Australia to avoid a technical recession. The central bank left official interest rates on hold at 0.1 per cent at its September board meeting; it has also advised that its bond-buying program will be maintained at the current level until at least February 2022.

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RESERVE BANK OF AUSTRALIA

RBA lauds $50bn budget boost

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Original article by Patrick Commins
The Australian – Page: 1 & 4 : 21-Apr-21

The federal government had forecast a $198bn Budget deficit for 2020-21 in its mid-year economic and financial outlook. The Department of Finance has advised that the Budget bottom line improved by $23bn during the first eight months of the financial year; some economists now expect the full-year deficit to be about $50bn lower than had been forecast in December. Meanwhile, the Reserve Bank of Australia says the strong economic rebound has seen national GDP growth return to its pre-pandemic level. The RBA reiterated in the minutes of its monthly board meeting that the cash rate is likely to remain on hold until at least 2024.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, RESERVE BANK OF AUSTRALIA

Australia’s growth to beat forecasts: IMF

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Original article by Adam Creighton
The Australian – Page: 1 & 4 : 7-Apr-21

The International Monetary Fund has upgraded its economic growth forecast for Australia in 2021 to 4.5 per cent. Its previous forecast in January was for growth of 3.5 per cent. The IMF now expects the global economy to grow by six per cent in 2021 and 4.4 per cent in 2022. However, the IMF’s chief economist Gita Gopinath says the COVID-19 pandemic will require governments to continue to provide economic support measures. Meanwhile, Reserve Bank of Australia governor Philip Lowe expects the domestic economy to record above-trend growth in both 2021 and 2022.

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INTERNATIONAL MONETARY FUND, RESERVE BANK OF AUSTRALIA

Avalon outbreak inflicted $3.2bn hit

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Original article by Patrick Commins
The Australian – Page: Online : 4-Jan-21

The lockdown of Sydney’s northern beaches because of a COVID-19 outbreak is expected to have resulted in 34 million fewer hours being worked in December, according to modelling by KPMG. KPMG estimates this reduction in working hours would have inflicted a $3.2 billion hit to the economy, and would have reduced Treasury’s forecast that the Australian economy would grow by 3.2 per cent over the three months to December by 0.7 per cent. The Tourism and Transport Forum has separately predicted that Australians would spend $2.6 billion between Christmas Eve and 11 January, compared to an annual average of $5.5 billion in previous years, with the TTF representing large Australian hotel and travel businesses

CORPORATES
KPMG AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, TTF AUSTRALIA LIMITED TOURISM AND TRANSPORT FORUM

Bright future ahead: OECD forecasts great things for Australia

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Original article by Patrick Commins
The Australian – Page: 1 & 5 : 2-Dec-20

The OECD is upbeat about the outlook for the Australian economy, forecasting that it will grow by 3.2 per cent in 2021. This compares with its previous forecast of 2.5 per cent. The domestic economy is now expected to contract by just 3.8 per cent in 2020, rather than 4.1 per cent as forecast by the OECD in September. The Paris-based organisation has also cautioned against withdrawing fiscal and monetary policy support prematurely. Meanwhile, economists have forecast that the economy grew by between 2.8 per cent and four per cent in the September quarter, ahead of the release of national accounts data on 2 December.

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Construction down by $5b over two years

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Original article by Michael Bleby
The Australian Financial Review – Page: 39 : 5-Nov-20

The Australian Construction Industry Forum has forecast that construction activity will fall by 3.2 per cent in 2020-21 due to the impact of COVID-19. Construction work in the accommodation sector is tipped to fall by 34 per cent, while a 23 per cent decline in entertainment and recreation projects is expected. However, the ACIF expects an increase in construction work in the industrial property, health and aged-care sectors. Activity in the residential construction sector is expected to remain subdued for several years, but growth in home renovations is forecast.

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AUSTRALIAN CONSTRUCTION INDUSTRY FORUM

Deficit high but less than predicted

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Original article by Adam Creighton,Geoff Chambers
The Australian – Page: 4 : 28-Sep-20

Deloitte Access Economics expects the federal government to announce a 2020-21 Budget deficit of $198.5bn on 6 October. This is just $14bn higher than the government had forecast in June. Chris Richardson of Deloitte says personal and corporate income tax receipts will exceed the government’s low expectations, while commodity prices have been more resilient than anticipated. He notes that the iron ore price in particular is still well above the Treasury’s projections. However, Deloitte expects federal debt to be about $401bn higher than the government’s pre-pandemic forecasts in 2023.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD,AUSTRALIA. DEPT OF THE TREASURY

Resource exports face $40bn hit

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Original article by Jared Lynch
The Australian – Page: 13 & 16 : 28-Sep-20

Australia’s resources and energy exports rose to a record $290bn in 2019-20, driven by a rally in the iron ore price. However, the Department of Industry’s latest Resources and Energy Quarterly report forecasts that the nation will export just $256bn worth of commodities in 2020-21. The total value of resources and energy exports in 2021-22 is forecast to be $252bn. The Department expects a pullback in the iron ore price to around $US85 a tonne by the end of 2020-21; iron ore shipments are expected to fall to $80bn, after reaching a record $102bn in 2019-20. Meanwhile, gold export earnings are forecast to reach a record $31bn in 2020-21.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES