Australia's economy difficult to call in 2016 - ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 22, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - Analysts at ANZ who are wrapping up for the year explained their outlook for 2016 for Australia.

    Key Quotes:

    "As we conclude 2015, Australia’s economic outlook remains patchy and difficult to read. GDP growth picked up to 2.5% y/y in the September quarter, while a booming housing market and a lower AUD have supported other indicators such as the labour market and business confidence and conditions. However, business investment remains in the doldrums and softer than expected revenues flows for the Commonwealth and most state governments is hindering public demand.

    The key question is what do these contrasting forces mean for 2016? We are expecting some of the drivers that supported growth through 2015 to ease. In particular, the housing market looks to have already turned the corner, and we are expecting a lesser contribution to economic growth next year, as construction activity plateaus (albeit at a historically high level).

    In addition, the AUD is unlikely to boost net exports to the same extent as it has recently, as further depreciation in the currency will be at a slower pace than what we have already experienced. As a result, ANZ believes the economy will require a little further stimulus in 2016 in the form of two more 25bps rate cuts from the RBA. We don’t expect these will be required until around the middle of the year and have currently pencilled them in for May and August."
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