Free Submission Public Relations & NewsPR-inside.com
Home
Deutsch English

Finance
Australia Business Forecast Report Q3 2013

Australia Business Forecast Report Q3 2013 - new country guide report published


Print article Print article
© companiesandmarkets.com

companiesandmarkets.com
companiesandmarkets.com
2014-02-19 07:53:01 - Australia Business Forecast Report Q3 2013 - a new country guide report on companiesandmarkets.com

Recent economic data releases suggest that the slowdown in economic activity in Australia is becoming increasingly evident. We maintain our outlook for real GDP growth to come in at a sombre pace of 2.1% in 2013, as the mining industry pares back its investments weighed down by high costs and the weakening Chinese economy dims the industry´s profit outlook.

We believe that the housing market remains precarious, as the affordability of homes continues to edge to a new low. Given our poor outlook for the Australian job market in 2013, in which we forecast unemployment to reach 6.0% by the end of the year, we believe that demand for housing will decline. The overextended household balance sheets further augur the growth

 

 

in housing-related credit growth. In our opinion, the Australian banking sector is the sector most leveraged on the housing market and we expect that declines in house prices will adversely impact the industry.

The ruling Australian Labor Party (ALP) barely clings on to its parliamentary majority and the party´s austerity stance has unravelled, slowly but surely. We believe that the party will try to introduce more populist policies in an effort to consolidate support for the ALP, but expect that the increasingly hostile environment against debt to restrain the government´s expenditures. Federal elections are set to be held on September 14.

We forecast the Reserve Bank of Australia (RBA) to hand out another 25 basis points worth of cuts, but have highlighted the growing risk that the central bank could cut more as we expect economic slowdown to be far deeper than the RBA´s current estimates. We believe that central bank will continue to attempt to stave off a decline in credit growth by easy monetary conditions further.

Major Forecast Changes

We have revised our forecast for the fiscal accounts to remain in deficit until fiscal year 2020/21 (July-June), delayed from our previous forecast of FY2017/18 due to the substantial revision in estimated revenues that were due from the carbon and mineral resource rent taxes. Contrasting the policies provided by the two major parties, ALP and Liberal-National coalition, we believe that a coalition government is likely to incur less debt, although both will be unable to quickly return the fiscal accounts to surplus. Given that we believe that the Liberal-National coalition is likely to win sufficient seats to form a government in the upcoming elections, we expect the deficit to start narrowing in FY2014/15, before returning to surplus in FY2020/21.

Key Risks To Outlook

China could implement aggressive stimulus measures to support its weakening economy, which would in turn support Australian exports and boost. While we maintain that any Chinese stimulus is likely to be smaller than the previous boost in 2008/2009, this remains a key risk and is something we will be watching closely.

Australian banks continue to be highly exposed to the domestic housing market. Given its reliance on external markets for funding, the banks could face a liquidity crisis should external counterparts withhold funding due to the deterioration of its balance sheet as the housing market sours. In order to prevent financial panic, government intervention could be needed in this scenario, which could force the budget deficit into double-digit territory.The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

Click for report details: www.companiesandmarkets.com/Market/All-Sectors/Country-Guide/Aus ..

Browse all All Sectors Country Guide Reports www.companiesandmarkets.com/Market/All-Sectors/Country-Guide?aCo ..

Browse all All Sectors Company Profile Reports www.companiesandmarkets.com/Market/All-Sectors/Company-Profile?a ..

Browse all Latest Country Guide Reports www.companiesandmarkets.com/Market/All/Country-Guide?aCode=f3fb3 ..

About Us
Companiesandmarkets.com is a leading online business information aggregator with over 300,000 market reports and company profiles available to our clients. Our extensive range of reports are sourced from the leading publishers of business information and provide clients with the widest range of information available. In terms of company profiles, Companiesandmarkets.com’s online database allows clients access to market and corporate information to over 100,000 different companies. We provide clients with a fully indexed database of information where clients can find specific market reports on their niche industry sectors of interest.


Author:
Mike King
e-mail
Web: www.companiesandmarkets.com
Phone: London: +44 (0) 203 086 8600

Disclaimer: If you have any questions regarding information in these press releases please contact the company added in the press release. Please do not contact pr-inside. We will not be able to assist you. PR-inside disclaims contents contained in this release.
Latest News
Read the Latest News
www.newsenvoy.com

 


Terms & Conditions | Privacy | About us | Contact PR-inside.com | BidVertiser