If you need a reliable, accurate, thought provoking and informed economic forecasting at both local and international levels, look no further. Informed by Stephen's exceptionally broad experience and background, his
It would be a wild exaggeration to say that Australia has an inflation problem, but the March quarter CPI highlighted the fact that the strength of the domestic economy is spilling over into a somewhat uncomfortable acceleration in the inflation rate.
While the March quarter inflation rates came in under market expectations (which says more about those expectations than it does about the actual hard data), inflation is moving higher.
Whether it is the annual headline inflation rate – which has risen from a low of 1.2 per cent in the June quarter 2012 to 2.9 per cent now – or the underlying inflation rate – which has risen from a low of 1.9 per cent to 2.7 per cent now – the RBA can no longer sit on a record low cash rate of 2.5 per cent and be confident that a further acceleration in the inflation rate wont happen.
This article first appeared in the April edition of the Melbourne Review. See melbournereview.com.au
Australia is in the midst of a quite startling export boom. What is exciting and positive for Australia's longer run growth prospects is that the transition of the economy towards exports has much further to run.
The surge in exports and the prospects for yet further growth is largely the result of the once in 100 years mining investment frenzy over the past decade. Capacity in the mining sector has risen massively as the mining companies built the infrastructure needed to extract and transport the raw materials to the export markets, mainly in China and elsewhere in Asia.
Much has been written and discussed the fall away in mining investment. That is perhaps one of the most obvious aspects of the change in the structure of the economy over the next few years and nothing can or should be done to arrest that inevitable fall.