GROSS DOMESTIC PRODUCT – AUSTRALIA

Alarm over debt to GDP ratio

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Original article by Jacob Greber
The Australian Financial Review – Page: 4 : 30-May-16

Analysis by Morgan Stanley suggests that each additional $A1 of GDP in 2015 cost more than $A9 of debt to generate. Morgan Stanley economist Daniel Blake says Australia must find ways to generate economic growth that are less dependent on debt. He warns that the decline in the productivity of Australia’s debt is likely to increase the severity of any economic downturn that may occur. He also argues that tax incentives should encourage investment in innovation and business start-ups rather than residential property.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIAN LABOR PARTY

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

Spending spree lifts economy to highest speed in two years

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 3-Mar-16

The latest GDP data shows that the Australian economy grew by 0.6 per cent in the December 2015 quarter, and by three per cent year-on-year. The general consensus of economists was for annual growth of just 2.5 per cent. Economic growth was boosted by an increase in government and consumer spending, although the household savings rate fell to a post-global financial crisis low of 7.6 per cent. The stronger-than-expected economic growth rate will reduce the chances of further official interest rate cuts in the near-term.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, UBS HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RIO TINTO LIMITED – ASX RIO, GROUP OF SEVEN (G-7), ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

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

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

Beyond the boom: life in economy

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Original article by David Uren
The Australian – Page: 1 & 4 : 3-Dec-15

The latest GDP data shows that the Australian economy expanded by 0.9 per cent in the September 2015 quarter, and 2.5 per cent year-on-year. The quarterly GDP data bolstered both the Australian dollar and the local sharemarket on 2 December, while it will also help improve the Budget bottom line. Meanwhile, domestic demand has risen by 4.2 per cent in Victoria and 2.6 per cent in New South. However, the decline in capital investment in the resources sector has resulted in domestic demand falling in Western Australia and Queensland.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN BUREAU OF STATISTICS, BARCLAYS BANK PLC, AUSTRALIAN LABOR PARTY

Worst growth rate since Coalition elected Hockey shrugs off bad news

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 : 3-Sep-15

A spike in government spending, mainly on defence, helped prevent the economy shrinking for the first time in more than four years in the June quarter of 2015. Exports were down and investment was weaker, cutting GDP growth to 0.2 per cent from 0.9 per cent for the previous three months.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, VICTORIA UNIVERSITY, AUSTRALIAN LABOR PARTY, DELOITTE ACCESS ECONOMICS PTY LTD, ALPHABETA, INDUSTRY SUPER AUSTRALIA PTY LTD

RBA cuts economy’s speed limit

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 10 : 23-Jul-15

The Australian economy’s trend growth rate has traditionally been regarded as being within the range of three to 3.25 per cent. However, GDP growth has been below the trend rate for 11 consecutive quarters, and it has been above the trend rate just three times during the last 27 quarters. Reserve Bank governor Glenn Stevens has suggested that the lower economic growth of recent years may in fact represent the nation’s new trend growth rate. This would have significant implications for government revenue, unemployment and the cost of living.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED

Income hit to living standards

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 4-Jun-15

New figures show that Australia’s real GDP grew by a higher-than-expected 0.9 per cent in the March 2015 quarter, and by 2.3 per cent year-on-year. However, real GDP growth has remained below the long-run average for the last 11 quarters, while average income has fallen in each of the last four quarters. Treasurer Joe Hockey says the GDP data highlights the continued strength of the domestic economy, but economist Dr Andrew Charlton is concerned about the outlook for the economy and the nation’s living standards.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BUREAU OF STATISTICS, ALPHABETA, THE BOSTON CONSULTING GROUP PTY LTD, RESERVE BANK OF AUSTRALIA, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, CITIGROUP PTY LTD

Grim GDP figures may mean further rate cuts

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Original article by Vesna Poljak
The Australian Financial Review – Page: 18 : 2-Jun-15

The general expectation of economists is that Australia recorded GDP growth of about 0.6 per cent in the March 2015 quarter. However, Citigroup has forecast real GDP growth of just 0.5 per cent, while Damien Boey of Credit Suisse says there is the potential for GDP on a nominal basis to contract in the first two quarters of calendar 2015. Boey says the GDP outlook may prompt the Reserve Bank to further reduce the cash rate in the near-term.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL RESERVE BANK OF ATLANTA