ECONOMIC FORECASTING – AUSTRALIA

Don’t panic about property, HSBC says

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Original article by Michael Bleby
The Australian Financial Review – Page: 7 : 13-Apr-16

HSBC economist Paul Bloxham says that while Australia’s booming residential construction market faces a number of potential risks, these can be managed. He argues that when the construction boom wanes it will be replaced by growth in the services industry as a driver of the economy. House prices increased by nine per cent in 2015, but Bloxham forecasts growth of 3-4 per cent in 2016.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, BLOOMBERG LP, RESERVE BANK OF AUSTRALIA

Modelling shows company tax cut ‘not in national interest’

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Original article by Ben Potter
The Australian Financial Review – Page: 4 : 13-Apr-16

Victoria University’s Centre of Policy Studies has released economic modelling which concludes that a corporate tax rate cut would in turn result in a reduction in real incomes. The modelling was undertaken by Dr Janine Dixon, who says that while a lower company tax rate would increase domestic production, real incomes would be cut by between $A800 and $A2,000 in present value terms. The corporate tax rate is currently 30 per cent.

CORPORATES
VICTORIA UNIVERSITY. CENTRE OF POLICY STUDIES, AUSTRALIA. DEPT OF THE TREASURY, MELBOURNE ECONOMIC FORUM

NDIS could kick-start a boom in jobs and business

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Original article by Laura Tingle
The Australian Financial Review – Page: 6 : 14-Mar-16

The National Disability Insurance Agency has estimated that the Australian Government’s National Disability Insurance Scheme will create almost 29,000 jobs and boost the value of the disability services market to $A6.8bn. This is in line with figures from Federal Social Services Minister Christian Porter and New South Wales Disability Services Minister John Ajaka. The full rollout of the NDIS will commence in NSW and Victoria from July 2016.

CORPORATES
AUSTRALIA. NATIONAL DISABILITY INSURANCE AGENCY, AUSTRALIA. DEPT OF SOCIAL SERVICES, NEW SOUTH WALES. DEPT OF AGEING, DISABILITY AND HOME CARE, AUSTRALIAN LABOR PARTY

Australia at risk from hard landing in China

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 18-Feb-16

The Chinese economy expanded by just 6.9 per cent in 2015, and Oxford Economics forecasts a gradual slowing of economic growth over the next five years. However, Sian Fenner of Oxford Economics warns that Australia could face a recession in 2016 if the Chinese economy experiences a "hard landing". Fenner adds that in the event of a recession the Reserve Bank could reduce the cash rate to just 0.25 per cent, which would limit the extent of the economic downturn.

CORPORATES
OXFORD ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, AVIVA PLC, PEOPLE’S BANK OF CHINA, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

Income growth lowest in 50 years

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Original article by David Uren
The Australian – Page: 6 : 18-Jan-16

A report by Deloitte Access Economics forecasts 1.2 per cent growth in Australia’s national income in 2016, which is the lowest rate of growth since 1960. Factors such as a downturn in export prices and cost-cutting in the corporate sector is dampening growth in incomes, which will in turn affect government revenue. Deloitte notes that lower growth in wages will eventually negatively affect economic growth. The firm expects the domestic economy to expand by just 2.2 per cent in 2016 and 2.1 per cent in 2017.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, MORGAN STANLEY AND COMPANY INCORPORATED, JP MORGAN AND COMPANY INCORPORATED, CITIGROUP INCORPORATED, INTERNATIONAL MONETARY FUND, WAL-MART STORES INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD, STANDARD AND POOR’S ASX 200 INDEX, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

Australia an also-ran in TPP gains: World Bank

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Original article by Greg Earl
The Australian Financial Review – Page: 6 : 12-Jan-16

A study released by the World Bank in early January 2016 suggests that there will be modest benefits for Australia from the proposed Trans-Pacific Partnership (TPP) trade agreement. The TPP is forecast to result in a rise in Australia’s GDP of less than two percentage points by 2030. All other countries-signatories to the TPP, with the exception of the US, are expected to experience larger rises in GDP.

CORPORATES
WORLD BANK, TRANS-PACIFIC PARTNERSHIP

Households to drive the economy in 2016

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Original article by David Uren, David Crowe
The Australian – Page: 1 & 4 : 4-Jan-16

Federal Treasurer Scott Morrison says Australia’s economic growth remains strong, despite the revised forecasts for 2015-16 and 2016-17 in the recent mid-year Budget update. Morrison adds that household consumption is also strong, and stresses that government policies in 2016 will be aimed at strengthening consumer and business confidence in an election year. Bill Evans of Westpac has identified a further deterioration in the nation’s terms of trade as the largest risk to the economy.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN LABOR PARTY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Coalition gives up on surplus

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 16-Dec-15

The Australian Government’s Mid-Year Economic and Fiscal Outlook forecasts that the 2015-16 Budget deficit will blow out to $A37.4bn, compared with expectations of $A35.1bn in May. The deficit will also be higher than expected in the following three fiscal years, while GDP growth forecasts have been reduced for both 2015 and 2016. Meanwhile, the worsening Budget deficit may prompt ratings agencies to review Australia’s triple-A credit rating, although Stephen Walters of JP Morgan says this is unlikely in the near-term.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, JP MORGAN AUSTRALIA LIMITED, STANDARD AND POOR’S CORPORATION, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA

RBA’s Stevens sees hope in jobs growth

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 16-Dec-15

The Reserve Bank of Australia reduced its economic growth forecast in November 2015, but governor Glenn Stevens does not believe another downgrade is needed in the near-term. Stevens has also given indications that further interest rate cuts may not be necessary in the current monetary policy cycle, noting that the unemployment rate is well below the central bank’s expectations earlier in 2015. He adds that the downturn in commodity prices may put further downward pressure on the Australian dollar.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN BUREAU OF STATISTICS, UNITED STATES. FEDERAL RESERVE BOARD

Sober outlook for economy

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 25-Nov-15

Australia’s trend growth rate has usually been regarded as being around three per cent. However, the Treasury has confirmed that the December 2015 Budget update will be based on expectations of a potential growth rate of 2.75 per cent. Meanwhile, Reserve Bank governor Glenn Stevens forecasts that investment yields and global interest rates will remain low for some time. He has also warned Baby Boomers that they cannot expect to keep enjoying growth in dividends unless the companies they invest in are prepared to embrace more risk.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, UNITED STATES. CONGRESSIONAL BUDGET OFFICE, GREAT BRITAIN. DEPT OF THE TREASURY