It is easy to take a negative view of the world and Australian economic outlooks given various elements of uncertainty covered by the media. Chinese/USA trade disputes, Hong Kong political crisis, Brexit, Australian Banking Royal Commission/finance industry issues, low wages growth, bushfires and droughts all receive strong press. An analysis of respected economic reporting agencies, including the OECD and the RBA provides a more balanced view however.
ECONOMIC AND POLITICAL INFLUENCES
World
China and the USA are yet to fully settle their trade disputes, though it is noted that “Stage 1” resolutions have been negotiated. There is also no definitive outcome to Brexit at this point in time. Add to this climate change and digitalisation that are structurally changing the world economy – these issues also appear to be disrupting the alignment of the world political order. Such political and economic machinations lead to a lack of confidence in the business community that curtails investment. Details are as follows:
Australia
The RBA December Monetary Policy Comment notes that “the Australian economy appears to have reached a gentle turning point. The central scenario is for growth to pick up gradually to around 3% in 2021”.
This appears a relatively positive outlook, given the most recent years’ growth was limited to 1.7%. The positive outlook from the RBA is noted to be due to the following main reasons:
Small Business Outlook for 2020
Over a long period of time this author has seen strong alignment between small business confidence levels and the state of the residential property market (i.e. when housing prices are increasing consumer and business confidence levels will typically follow). This relationship has been such a strong factor, that is it worthwhile taking stock of the outlook for the Australian property market. Details are as follows:
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