Global & Australian Forecasts – November 2014

Recent monthly economic indicators and business surveys show continued moderate global economic growth along with big variations between the major economies. Low interest rates, falling oil prices and smaller budget cutbacks in big advanced economies should underpin.

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Key Points:

  • Recent monthly economic indicators and business surveys show continued moderate global economic growth along with big variations between the major economies. Low interest rates, falling oil prices and smaller budget cutbacks in big advanced economies should underpin a gradual acceleration in growth to 3½% in 2015. Global economic growth remains heavily reliant on the continued good performance of China and the US with weakness across Japan, the Euro-zone and Latin America and a sluggish performance in Emerging East Asian economies.
  • Jump in Australian business conditions points to strong start to Q4 but growth still constrained by weak terms of trade, soft labour market and signs of a softening in building cycle. GDP forecasts up slightly: 2014/15 2.9% (was 2.8%) and 2015/16 3.2% (unchanged). Unemployment still to peak at around 6½% and no change in cash rate expected until tightening begins near the end of 2015.

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