ECONOMIC FORECASTING – AUSTRALIA

$40b projects to aid tourism

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Original article by Jamie Freed
The Australian Financial Review – Page: 14 : 20-Jan-15

A report by Scott Ryall of CLAA identifies large tourism projects worth $A40 billion that are in progress or preparation. Ryall states that Asian tourists will assist the Australian economy in withstanding waning mining investment. The report contends that Asian tourism will bolster industries from ­construction and aviation to casinos, malls and wine. Arrium, Boral and Mirvac are among the businesses expected to benefit from tourism development projects

CORPORATES
CLSA AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE, ARRIUM LIMITED – ASX ARI, BORAL LIMITED – ASX BLD, LEND LEASE GROUP LIMITED – ASX LLC, MIRVAC GROUP – ASX MGR, SCENTRE GROUP – ASX SCG, NOVION PROPERTY GROUP – ASX NVN, CROWN RESORTS LIMITED – ASX CWN, ECHO ENTERTAINMENT GROUP LIMITED – ASX EGP, SKYCITY ENTERTAINMENT GROUP LIMITED – ASX SKC, TREASURY WINE ESTATES LIMITED – ASX TWE, TTF AUSTRALIA LIMITED TOURISM AND TRANSPORT FORUM, TTF AUSTRALIA LIMITED, QANTAS AIRWAYS LIMITED – ASX QAN, CHINA EASTERN AIR HOLDING COMPANY

Treasury experts $290bn wide of the mark on budget forecasts

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Original article by David Uren
The Australian – Page: 1 : 18-Dec-14

Every single one of the Australian Treasury Department’s four-year forecasts in Budget estimates since 2010 has had to be downgraded later on. The total amount involved is $A290bn, and the poor track record casts doubt as well on the latest prediction, made in the December 2014 Mid-Year Economic and Fiscal Outlook, that a surplus will be restored in 2019-20. In the agency’s defence, Deloitte Access Economics’ Chris Richardson notes that reliable forecasts have become very hard to achieve due to the nation’s exposure to commodity export markets for coal, iron ore and LNG

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

Deficit heads for $40bn

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Original article by David Crowe
The Australian – Page: 1 & 2 : 21-Nov-14

Citigroup believes that the Australian Government’s forecast for a 2014-15 Budget deficit of $A30bn will have to be revised up by $A10bn, with a major factor the fall in the iron ore price and the effect on the nation’s terms of trade. Treasurer Joe Hockey, who will soon release the Mid-Year Financial and Economic Outlook data, concedes that the commodities slump is an issue. However, he also stresses that there is great potential to boost services sector exports

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, CITIGROUP PTY LTD, DELOITTE ACCESS ECONOMICS PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED, MACROECONOMICS.COM.AU PTY LTD, AUSTRALIAN LABOR PARTY

Risk of ‘fiscal fiasco’ if China runs off the rails

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Original article by David Uren
The Australian – Page: 2 : 27-Oct-14

Deloitte Access Economics has released a new report on the potential impact on Australia of a more rapid slowing of GDP growth in China. The latter accounts for 38% of Australian exports, and if its growth rate falls to under 4% per annum Australia is likely to experience a recession. The forecasting firm warns that the Federal Government must do more to rein in the Budget deficit in light of this scenario. However Deloitte still maintains that the most likely outcome is growth in China of 7% or more, and a fall in Australia’s terms of trade of 9.2% for 2014-15 before less dramatic declines of between 1% and 2% a year in the period to 2018-19

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

Infrastructure needed ‘to pick up slack’

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Original article by Glenda Korporaal, Annabel Hepworth
The Australian – Page: 17 : 20-Oct-14

An Australian Institute of Company Directors forum has heard from Kevin McCann, chair of investment banking firm Macquarie Group. He said the national economy was likely to remain subdued, and there was an urgent need for major infrastructure projects by governments to provide a stimulus as capital expenditure in sectors other than energy declines. Such an approach has already been promised by the Federal Government, and will be promoted by it at the Group of 20 (G20) leaders’ summit in November 2014

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, GROUP OF TWENTY (G-20), UNITED STATES. FEDERAL RESERVE BOARD, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, COCHLEAR LIMITED – ASX COH, RESERVE BANK OF AUSTRALIA

RBA warns: share sell-off will be violent

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Original article by Adam Creighton
The Australian – Page: 21 : 15-Oct-14

A Citi investment conference in Sydney on 14 October 2014 heard from Guy Debelle, head of financial markets at the Reserve Bank of Australia. He argued investors were showing irrational exuberance and were ignoring risk at their own peril. Debelle said the stock market volatility of recent weeks was coming unexpectedly late given factors such as rising geopolitical tensions, and an eventual selling of fixed-interest instruments globally would be "violent". He also noted that new regulations prompted by the global financial crisis had reduced the scope for liquidity

CORPORATES
RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, STANDARD AND POOR’S ASX 200 INDEX, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Bullish Hockey has faith in boom

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Original article by David Crowe
The Australian – Page: 20 : 10-Oct-14

Opinion is divided on whether the resources boom has ended and export-focused nations must restructure their economies accordingly. During a forum staged in the US by the International Monetary Fund, Australian Treasurer Joe Hockey argued that demand for commodities such as iron ore and gas would continue to be healthy and underpin the nation’s prosperity. He pointed to the emergence of the middle class as consumers in the Asian region. The assessment was in contrast with those given by South African Finance Minister Nhlanhla Nene, Indonesian Finance Minister Muhamad Chatib Basri and Nigerian Finance Minister Ngozi Okonjo-Iweala

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND, WORLD BANK, GEORGE WASHINGTON UNIVERSITY, AUSTRALIAN LABOR PARTY

Foreign students to bring in $30b

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Original article by Alan Olsen
The Australian Financial Review – Page: 35 : 6-Oct-14

Australia’s education export industry was worth $A16.4bn in 2010, compared with just $A7.9bn in 2004. This fell to $A14.6bn in fiscal 2013, but there has since been a rebound in international student enrolments as the Australian dollar weakened. It is estimated that if the number of foreign students continues to grow by about five per cent annually in coming years, the nation’s education export market could be worth $A30.8bn by 2020

CORPORATES
AUSTRADE, ECONOMIST INTELLIGENCE UNIT

Resource exports to dip before a pick-up

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Original article by David Uren
The Australian – Page: 20 : 25-Sep-14

Australia’s Bureau of Resources & Energy Economics forecasts 43 per cent growth in the nation’s earnings from resources exports in the next four years. LNG exports are expected to be a key driver of earnings growth over this period, while the agency forecasts that coal and iron ore prices will rebound in the next several years. Earnings from resources exports are forecast to fall by 1.4 per cent in 2014 before rising by 13.4 per cent in 2015

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY. BUREAU OF RESOURCES AND ENERGY ECONOMICS, WESTPAC BANKING CORPORATION – ASX WBC

Drop in dollar helps, but don’t bet on its slide

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Original article by Adam Creighton
The Australian – Page: 18 : 16-Sep-14

Economists do not expect the Australian dollar to fall much further. The currency has remained high since the global financial crisis. However, it dropped below $US0.90 in mid-September 2014. The fall in the price of iron ore will reduce Federal Government revenues, but the lower dollar will lift the US dollar earnings of Australian companies. Robert Rennie, of Westpac Banking, believes that the currency is close to "fair value" of about $US0.88

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, UNITED STATES. FEDERAL RESERVE BOARD