ECONOMIC FORECASTING – AUSTRALIA

More RBA rate rises unwarranted as Yarra cuts growth outlook

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Original article by Ronald Mizen
The Australian Financial Review – Page: 4 : 9-Jul-24

Yarra Capital’s chief economist Tim Toohey has downgraded his growth forecast for the Australian economy to just 1.75 per cent in 2024-25, compared with his previous expectations of 2.25 per cent growth. In contrast, the Reserve Bank anticipates growth of 2.1 per cent in the current financial year, while the federal government’s 14 May budget papers show that the Treasury expects the economy to expand by two per cent. Toohey says factors such as a slowdown in employment growth among non-migrant workers and plans to curb the migrant intake could dampen economic growth, and in turn weaken the case for a further tightening of monetary policy.

CORPORATES
YARRA CAPITAL PARTNERS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Economy on track for soft landing: Chalmers

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Original article by Patrick Commins, Geoff Chambers
The Australian – Page: 4 : 12-Jun-24

Treasurer Jim Chalmers will use a speech on Wednesday to defend the federal government’s high-spending 14 May budget. He will contend that it would be irresponsible for the government to cut its expenditure too deeply in the current environment of flat economic growth and high interest rates. He will also state that Labor’s "more balanced approach" will bring inflation under control without "crunching the economy". Chalmers will in turn state that the government is "cautiously confident" that the economy will experience a ‘soft landing’.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Economy, rates in a holding pattern

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Original article by Eli Greenblat
The Australian – Page: 15 : 23-Apr-24

Deloitte Access Economics has claimed that the Australian economy is in a "holding pattern", while it does not expect the Reserve Bank to move on interest rates until November. Deloitte states that inflation is beginning to recede, while it expects around 100,000 people will lose their jobs by the end of the year, lifting the unemployment rate to 4.6 per cent. It notes that the revamped stage three tax cuts will take effect in the second half of the year, boosting disposable income, but that the housing crisis remains a concern.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA

Blue-collar workers to bear the brunt of jobs market slowdown

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Original article by Matthew Elmas
The New Daily – Page: Online : 20-Feb-24

Economists have for some time been forecasting that Australia’s labour market is set for a slowdown after several years of strong growth. A report from Deloitte Access Economics has forecast 1.5 per cent growth in white-collar jobs in 2024-25, following estimated growth of 2.5 per cent in 2023-24. Meanwhile, growth in blue-collar jobs is expected to slow to just 0.3 per cent, with industries such as agriculture, manufacturing and wholesaling set to shed jobs. Deloitte Access Economics partner David Rumbens notes that two-thirds of the nation’s jobs growth in 2023 occurred during the first half of the year, while the number of job vacancies has fallen by 14.4 per cent over the last 12 months.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

Don’t get your hopes up on rates cut: OECD

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Original article by Patrick Commins
The Australian – Page: 4 : 6-Feb-24

The OECD has forecast that Australia’s inflation rate will fall to 3.5 per cent by mid-2024 and just 2.75 per cent by mid-2025. The Paris-based organisation is also upbeat about inflation globally, forecasting that inflation will be in line with central bank objectives in most Group of 20 countries by the end of 2025. However, the OECD has also cautioned central banks against easing monetary policy too quickly in response to the downturn in inflation. Meanwhile, Challenger Limited’s chief economist Jonathan Kearns has downplayed the prospects of multiple interest rate cuts in Australia during 2024; he says a single rate cut late in the year is most likely.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, CHALLENGER LIMITED – ASX CGF

RBA won’t lift rates again, says OECD

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Original article by Michael Read
The Australian Financial Review – Page: 4 : 30-Nov-23

The latest CPI data has strengthened the case for leaving Australia’s official interest rates on hold in December, with the annual inflation rate falling from 5.6 per cent in September to just 4.9 per cent in October. Meanwhile, the OECD expects the cash rate to remain on hold at 4.35 per cent until the September 2024 quarter, while the Paris-based organisation forecasts that a gradual easing of monetary policy will see it fall to 3.6 per cent by the end of 2025. Meanwhile, the OECD expects cost-of-living pressures to reduce Australia’s GDP growth from 1.9 per cent in 2023 to just 1.4 per cent in 2024. It also anticipates that inflation will fall below three per cent by 2025.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Odds of Melbourne Cup Day rate rise shorten

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Original article by Shane Wright, Rachel Clun
The Age – Page: Online : 18-Oct-23

The minutes of the Reserve Bank of Australia’s board meeting for October show that it considered increasing the cash rate. The minutes stated that the RBA board has a low tolerance for a slower return of inflation to the target range than currently expected, and that upcoming economic data will determine whether the current monetary pause is sustained. Inflation and unemployment data to be released next week are likely to be a key factor as to whether the cash rate is increased in November. Meanwhile, Deloitte Access Economics has forecast that economic growth will slow to one per cent by the March 2024 quarter, and that the nation will experience both a per capita recession and a recession in the retail sector.

CORPORATES
RESERVE BANK OF AUSTRALIA, DELOITTE ACCESS ECONOMICS PTY LTD

Nation stuck on grow slow: OECD

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Original article by Tom Dusevic
The Australian – Page: 1 & 4 : 20-Sep-23

The OECD still expects Australia to record GDP growth of 1.8 per cent in 2023, in line with its previous forecast. However, GDP growth is expected to be just 1.3 per cent in 2024. The OECD has also forecast that Australia’s headline inflation rate will fall to 3.2 per cent in 2024, down from 5.5 per cent in 2023. However, the Reserve Bank of Australia’s preferred measure of core inflation is forecast to rise to 5.9 per cent in 2023 before falling to 3.3 per cent next year. Meanwhile, the minutes from the RBA’s monthly board meeting shows that board members considered lifting the cash rate to 4.35 per cent in September, due to concerns about inflation

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, RESERVE BANK OF AUSTRALIA

Fears of a slow-economy China contagion

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Original article by Patrick Commins, Joe Kelly
The Australian – Page: 1 & 4 : 23-Aug-23

The federal government’s latest Intergenerational Report will show that Australia faces slower growth and higher taxes due to an ageing population and lower productivity. The Treasury has also forecast that quarterly economic growth will be ‘marginal’ over the next year, leaving Australia vulnerable to domestic and overseas shocks. The deteriorating Chinese economy is a key potential risk to Australia’s growth outlook, with the Chinese government appearing to be reluctant to pursue further stimulus measures at this stage. Meanwhile, Treasury officials expect the projected Budget surplus of more than $20bn for 2022-23 to be a one-off, with the prospect of deficits for at least the next decade.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

AI will turbocharge economy

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Original article by Noah Yim
The Australian – Page: 2 : 19-Jul-23

Tech Council of Australia and Microsoft have released a report which highlights the potential economic benefits of generative artificial intelligence technology. The report estimates that a rapid take-up of AI could boost the domestic economy by up to $115bn a year by 2030; a slower deployment of AI would boost the economy by around $45bn annually over the same time-frame. The report adds that the economic benefits of AI would primarily be derived from improving existing industries and enabling the creation of new products and services.

CORPORATES
TECH COUNCIL OF AUSTRALIA, MICROSOFT AUSTRALIA, MICROSOFT CORPORATION