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The Lucky Country holding up pretty well

The Australian economy performed better than expected in 2015. The mining boom ended around four years ago and yet the Australian economy has still not fallen into the recession that many feared, with non-mining activity helping the economy continue to grow. In fact at 3% GDP growth through 2015, Australian was a star performer compared to the US with 1.9%, the Eurozone with 1.5% and Japan with 0.5%. This note looks at the outlook and what it means for investors.

In fact at 3% GDP growth through 2015, Australian was a star performer compared to the US with 1.9%, the Eurozone with 1.5% and Japan with 0.5%. This note looks at the outlook and what it means for investors.

Dr Shane Oliver has explained how the economy is situated and has given us an insight of the direction it is heading. The three key points in the article being:

  • The Australian economy grew a surprisingly strong 3% through 2015, as non-mining activity and export volumes helped offset the slump in mining investment.
  • Growth is likely to slip back to around 2.5% this year, so a further RBA rate cut is still likely, albeit it’s a close call.
  • Low interest rates, low petrol prices, the boost from the low $A, the improved performance of “low mining” states like NSW and Victoria and the likelihood that the slump in mining investment is getting close to the bottom are reasons not to get too gloomy on Australia and Australian assets.

Download and read the full article.

 

What you need to know 

Source: AMP

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