ECONOMIC FORECASTING – AUSTRALIA

Geelong jobless disaster

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Original article by Harrison Tippett
Geelong Advertiser – Page: 9 : 29-Jun-17

Data from Roy Morgan Research shows that the underemployment rate in Geelong is 8.5 per cent, while 17 per cent of people in the Victorian regional city are either unemployed or seeking more work. Roy Morgan executive chairman Gary Morgan says underemployment is the biggest problem facing Australia, and failure to take action will see the Australian dollar slump and the economy go into recession. Meanwhile, Geelong Trades Hall secretary Colin Vernon says the increase in underemployment could result in workers being exploited.

CORPORATES
ROY MORGAN RESEARCH LIMITED, GEELONG TRADES HALL, AUSTRALIAN BUREAU OF STATISTICS

BIS sounds warning on our debt levels

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Original article by Myriam Robin
The Australian Financial Review – Page: 20 : 26-Jun-17

Data from the Reserve Bank shows that Australia’s household debt-to-income ratio is currently at a record 189 per cent. Meanwhile, the Bank for International Settlements notes that the Australian economy is one of several that have high levels of household debt which would be vulnerable in the event of a sharp rise in interest rates. The BIS report also notes that the cost of servicing this debt is already having an impact on economic growth.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK FOR INTERNATIONAL SETTLEMENTS

RBA worries property could spark downturn

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Original article by Jacob Greber
The Australian Financial Review – Page: 2 : 21-Jun-17

The minutes of the Reserve Bank’s June 2017 monetary policy meeting show that board members are concerned about the potential impact of rising household debt and residential property prices on economic growth. Concerns were also raised that financial stability could be undermined by record low interest rates. Board members also stressed the need for continued co-operation between the central bank and other regulatory agencies, such as the Australian Prudential Regulation Authority.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COUNCIL OF FINANCIAL REGULATORS, UNITED STATES. FEDERAL RESERVE BOARD

Economy at slowest pace since GFC

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Original article by Adam Creighton
The Australian – Page: 1 & 2 : 8-Jun-17

The latest national accounts data shows that the Australian economy expanded by just 1.7 per cent in the year to March 2017, which is the lowest annual growth rate for eight years. GDP growth was 0.3 per cent in the March quarter, compared with 1.1 per cent in the December 2016 quarter. Treasurer Scott Morrison has downplayed concerns about the outlook for the economy and the implications for May 2017 Budget forecasts. He notes that 17 out of 20 industry sectors recorded growth during the March quarter, while business investment has risen for two consecutive quarters.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, CITIGROUP PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Small cap stock the winners in slow-growth local economy

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Original article by Myriam Robin
The Australian Financial Review – Page: 27 : 7-Jun-17

Victor Gomes of UBS says any economic slowdown in Australia means small-capitalisation stocks with significant offshore earnings are likely to perform well. Large-cap stocks have outperformed in recent years, and some small-caps were heavily sold down during the February 2017 reporting season. Robert Talevski of Activus Investment Advisors says investors need to focus on the long-term investment horizon when buying into small-caps.

CORPORATES
UBS HOLDINGS PTY LTD, ACTIVUS INVESTMENT ADVISORS PTY LTD, FORAGER FUNDS MANAGEMENT PTY LTD, STANDARD AND POOR’S ASX SMALL ORDINARIES INDEX, STANDARD AND POOR’S ASX 20 INDEX, AMAZON.COM INCORPORATED, YOWIE GROUP LIMITED – ASX YOW, GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED – ASX GMA

Australia ‘must deal with quite spectacular housing bubble’

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Original article by David Rogers
The Australian – Page: 28 : 1-Jun-17

A sharp downturn in the residential property market and an economic slowdown in China are among the biggest risks to the Australian economy, according to Willem Buiter of Citigroup. The investment bank’s global chief economist warns that the Federal Government’s plans to invest $A75bn in infrastructure over 10 years will not be sufficient to offset the impact of a property market downturn. He says the Government must take action to ensure that the housing market has a soft landing.

CORPORATES
CITIGROUP INCORPORATED, THE GOLDMAN SACHS GROUP INCORPORATED, LONDON SCHOOL OF ECONOMICS, BANK OF ENGLAND, WORLD BANK, EUROPEAN COMMISSION, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CORELOGIC AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Budget in black by 2020: IMF

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Original article by David Uren
The Australian – Page: 1 & 5 : 26-Apr-17

The International Monetary Fund has forecast that the combined Budget deficit of Australia’s federal and state governments will fall to $A39.7bn in calendar 2017, compared with $A45.8bn in 2016. It also forecasts that a $A27bn increase in state and federal government revenue over the next four years will result in a combined Budget surplus of $A2.5bn in 2020. The IMF had previously forecast that a surplus would not be achieved until 2022. The IMF also expects the combined federal and state debt to top $A392.9bn in 2019, before falling to $A375.3bn in 2021.

CORPORATES
INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE TREASURY

IMF outlook perks up for jobs, inflation

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 19-Apr-17

The International Monetary Fund has forecast global economic growth of 3.5 per cent in 2017 and 3.6 per cent in 2018. The latest World Economic Outlook report also forecasts that Australia’s economic growth rate will rise to 3.4 per cent year-on-year by the December 2017 quarter, while the economy is forecast to grow by three per cent in 2018. Meanwhile, the IMF expects the nation’s unemployment rate to fall to 5.1 per cent in 2018. The IMF’s outlook for Australia is much more bullish than the most recent forecasts issued by the Treasury.

CORPORATES
INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED

We’re on the brink of recession but the government has its head buried in the sand

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Original article by John Hewson
The Sydney Morning Herald – Page: 18 : 23-Dec-16

The Australian Government’s Mid-Year Economic and Fiscal Outlook, issued on 20 December 2016, is based on assumptions of dubious validity. Australia’s GDP declined 0.5 per cent in the September 2016 quarter and yet the Government forecasts consistent economic growth over the next five years. Contrary to optimistic forecasts of the Government, Australia may soon experience a recession.

CORPORATES
AUSTRALIAN NATIONAL UNIVERSITY

Downgrade is on its way

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Original article by Philip Baker
The Australian Financial Review – Page: 1 : 20-Dec-16

S&P Global Ratings, Moody’s Investors Service and Fitch Ratings have decided against downgrading Australia’s AAA credit rating following the release of the Mid-Year Economic and Fiscal Outlook on 19 December 2016. However, S&P warned that Australia’s fiscal position could worsen. Stephen Walters, chief economist at the Australian Institute of Company Directors, says Australia is almost certain to lose the highest credit rating.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, S&P GLOBAL RATINGS, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS