ECONOMIC FORECASTING – AUSTRALIA

Economic cost of bushfires estimated at $2 billion and rising

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Original article by Jessica Irvine
The Age – Page: Online : 7-Jan-20

Terry Rawnsley of SGS Economics & Planning estimates that the bushfires will reduce national gross domestic product by about 0.15 per cent in 2019-20. He adds that the economic cost to bushfire-affected regions will be within the range of $1.1bn to $1.9bn. Meanwhile, Shane Oliver of AMP Capital says the bushfire crisis is likely to reduce national economic output by between 0.25 per cent and 1 per cent, while economist Saul Eslake still expects the federal government to deliver a Budget surplus for 2019-20.

CORPORATES
SGS ECONOMICS AND PLANNING PTY LTD, AMP CAPITAL INVESTORS LIMITED

Yuletide bounce falls flat for shops

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Original article by Patrick Commins
The Australian – Page: 3 : 24-Dec-19

AMP Capital’s Shane Oliver says the bushfire crisis is likely to affect consumer sentiment during the retail sector’s crucial Christmas trading period. He notes that consumer confidence had already been dampened by factors such as low wages growth, a high underemployment rate and economic uncertainty. The Australian Retailers Association has forecast that consumer spending will by rise 2.6 per cent to $52.7bn between 14 November and 24 December, while it expects spending at post-Christmas sales to rise 2.4 per cent to $18.7bn.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, AUSTRALIAN RETAILERS ASSOCIATION, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Economy at risk of hit from flames

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Original article by Greg Brown
The Australian – Page: 1 & 4 : 23-Dec-19

Australian Industry Group CEO Innes Willox says the bushfire crisis could result in negative GDP growth for the December quarter, following weak growth in the three months to September. Willox adds that sectors such as tourism and retail in particular are likely to be hard hit. National Australia Bank’s chief economist Alan Oster warns that the bushfires will further adversely affect consumer sentiment, although he says growth in the public sector is likely to prevent the economy from contracting in the December quarter. Federal Treasurer Josh Frydenberg stresses that it is too soon to estimate the economic impact of the bushfires.

CORPORATES
THE AUSTRALIAN INDUSTRY GROUP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN RETAILERS ASSOCIATION

Asia’s coal hunger to lift exports

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Original article by Greg Brown, Perry Williams
The Australian – Page: 1 & 2 : 18-Dec-19

Australia’s coal production will grow by 1.4 per cent annually over the next five years, according to a report from the International Energy Agency. The nation’s coal output is forecast to top 444 million tonnes in 2024, compared with 409 million tonnes in 2018. Thermal coal exports are forecast to increase from 203 million tonnes to 223 million tonnes over this period, with coking coal shipments to rise from 179 million tonnes to 196 million tonnes. Demand for Australian coal is expected to be driven by nations such as India, Vietnam and Indonesia. Greens MP Adam Bandt has called for legislation to phase out coal exports by 2030, claiming that "coal will kill us".

CORPORATES
INTERNATIONAL ENERGY AGENCY, AUSTRALIAN GREENS, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, AUSTRALIAN LABOR PARTY, MINERALS COUNCIL OF AUSTRALIA, ADANI MINING PTY LTD, SIEMENS AG

Surplus to survive $30bn blow

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 16-Dec-19

The federal government’s mid-year economic and fiscal outlook is forecast to confirm that the Budget will remain in surplus for the next four years. However, government revenue is expected to be up to $30bn lower than projected in the 2019 Budget, due to expectations that global and domestic economic growth will be lower than was forecast in April. Growth in wages is also expected to be lower than was forecast in the Budget. Meanwhile, the government is expected to maintain its forecast that the price of iron ore will average $US55 a tonne in 2019-20, even though it is significantly higher at present.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN LABOR PARTY

Spending forecasts raise GDP fears

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Original article by Matthew Cranston
The Australian Financial Review – Page: 7 : 29-Nov-19

Data from the Australian Bureau of Statistics shows that business investment fell by 0.2 per cent in the September quarter and by 1.3 per cent year-on-year. Mining investment increased by 1.2 per cent in the year to September, while investment in equipment, plant and machinery was down 3.5 per cent. Josh Williamson of Citigroup says the latter figure is likely to reduce GDP growth in the September quarter by 0.15 percentage points.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, CITIGROUP PTY LTD

Monetary policy beats fiscal stimulus

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 24-Oct-19

Treasury secretary Steven Kennedy is upbeat about the outlook for the Australian economy. He has told the Senate estimates committee that the economy is growing ‘modestly’ and it should continue to strengthen. Kennedy also contended that monetary policy is still a better option for boosting economic growth than fiscal stimulus. He also stressed the need for structural reform and an increase in labour productivity.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. SENATE STANDING COMMITTEE ON ECONOMICS, RESERVE BANK OF AUSTRALIA

PM to keep his cool on economy

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Original article by Rosie Lewis, Simon Benson, Richard Gluyas
The Australian – Page: 1 & 6 : 17-Oct-19

Prime Minister Scott Morrison has downplayed concerns about the outlook for the Australian economy, arguing that good economic and financial management is needed in times of uncertainty. Labor leader Anthony ­Albanese has responded to the International Monetary Fund’s latest downgrade of its economic growth forecast for Australia by calling for a stimulus package. Former federal treasurer Peter Costello has in turn urged supply-side reforms, arguing that fiscal and monetary policy have reached the limits of their effectiveness.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, INTERNATIONAL MONETARY FUND, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIAN RETAILERS ASSOCIATION

Surplus safe with fast-track tax cuts

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Original article by Adam Creighton
The Australian – Page: 6 : 16-Oct-19

The Centre for Independent Studies has released a report which warns that the federal government’s changes to the low- to medium-income tax offset will decrease­ GDP and the economic efficiency of the tax system. The report’s author, John Humphreys, estimates that the LMITO will reduce revenue by $35bn over the next four years, as it provides a disincentive to work. He adds that the second and third stages of the government’s tax cuts package will reduce revenue by $145bn over 10 years, and argues that the tax cuts can be brought forward without jeopardising Budget surpluses.

CORPORATES
THE CENTRE FOR INDEPENDENT STUDIES LIMITED, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN NATIONAL UNIVERSITY

IMF: global growth at decade low

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 16-Oct-19

The International Monetary Fund now expects global economic growth of three per cent in 2019, and has warned of a synchronised global slowdown. The IMF also expects the US-China trade war to reduce global growth by 0.8 per cent over the next two years. Australia’s economic growth forecast for 2019 has been downgraded from 2.1 per cent to 1.7 per cent, prompting shadow treasurer Jim Chalmers to urge the federal government to bring forward its mid-year Budget update. However, Prime Minister Scott Morrison says the domestic economy is still growing faster than all G7 nations except the US.

CORPORATES
INTERNATIONAL MONETARY FUND, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA