Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

Central bankers finding it hard to kick start growth

Deflation will threaten global markets throughout 2015 despite low interest rates and central bank stimulus, according to one expert.

In a paper titled Economic Insights: The Big Issues of 2015, CommSec chief economist Craig James said deflation was “occupying the minds of central bankers in the northern hemisphere”.

“It is quite remarkable, that with interest rates close to zero across many parts of the world and many central banks injecting stimulus via bond buying, that concerns about deflation still abound,” he said.

Advertisement
Advertisement

Mr James said sluggish economic growth in regions like Europe, Japan and parts of Latin America were fuelling deflationary fears.

“Central bankers are finding it hard to kick start growth,” he said. “Confidence remains shaky; consumers and businesses are reluctant to take on debt; and governments are unsure [of] the best way to move forward.”

Mr James said low inflation may be influenced by a change in the commodity price cycle.

“China has largely moved through the ramp-up phase of industrialisation where demand for resources runs ahead of supply,” he said.

“Supply has now caught up, and rather than commodity prices pushing higher, they are moving south, injecting a deflationary pulse.”

Mr James also suggested that lower oil prices were contributing to the risk of deflation.

“Saudi Arabia is effectively trying to support its competitive position, and the position of OPEC more generally, in the global oil market,” he said.

“US energy production has been ramped up through shale oil, and in other economies, gas, ‘green’ energy solutions, and nuclear fuel.”

Central bankers finding it hard to kick start growth
mortgagebusiness

Latest News

A major bank-owned lender has introduced a new LMI offering for first home buyers with a 15 per cent deposit. ...

New home sales have spiked off the back of the federal government’s HoemBuilder scheme, according to new research. ...

The percentage of auctions withdrawn in Melbourne was more than double Sydney’s withdrawal rate owing to the second round of lockdown in t...

FROM THE WEB
podcast

LATEST PODCAST: What's being done to support home buyers?

Do you expect COVID-19 to reduce or increase your business flows?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.