The bigger picture – A global and australian economic perspective

• Global: We are not expecting any acceleration in global growth in 2016 – with another year of growth a touch below 3% (very sub trend). We have modestly cut our 2016 growth numbers to take account of a deeper than expected recession in Brazil. Nevertheless, a combination of factors continues to underpin our view that we will see downbeat but continuing growth. However, further periods of market volatility are a possibility and hence downside risks to our forecasts. Sustainably faster growth requires serious reforms (for which there appears little appetite). In the near term Australian MTP growth is likely to remain around 4¼%.

• Australia: The recovery across the non-mining economy remains on track – confirmed by both the Q4 National Accounts and the NAB Business Survey – despite elevated risks. The rotation towards services activity continues, supporting the labour market, but weak national income and wages growth will continue to cap household consumption growth. Overall, real GDP forecasts are largely unchanged, with growth picking up in 2016 and 2017 (see below), but losing momentum in 2018. The unemployment rate will ease gradually to just above 5½% by end-16 and then remain broadly steady. Domestic conditions suggest the RBA is very much on hold but retains an easing bias amidst global risks.

For more details, please refer to the attached document.

• NAB’s World on two pages_March 2016 (PDF,248Kb)

More from NAB:

• Global and Australian forecasts – March 2016
• Australian Economic Update – Q4 GDP
• NAB Products – International and Foreign Exchange