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

Grexit risk 'muted': NAB

The financial fallout from the risk of Greece exiting the eurozone has been somewhat "muted" compared with the country's previous crises, according to NAB.

Released earlier this week, the bank's global and Australian economic forecasts said concerns about Greece exiting the eurozone have raised both financial market volatility and downside risks to global growth.

However, the problems in Greece have had "much less impact than earlier episodes" – mainly due to the improved support systems for sovereign debt that are now in place, NAB said.

Advertisement
Advertisement

"[European Central Bank] bond buying and [European Financial Stability Facility] lending ... have resulted in much lower upward pressure on eurozone periphery bond yields.

"The pattern of exposure to Greek debt has also changed with eurozone agencies now holding most of Greece’s government debt and banks winding back their once sizeable exposure to the country," the report said.

Furthermore, it is the "apparent bursting of the Chinese equity market" that should be causing global investors the most concern, NAB said.

According to the report, the equivalent of US$3.5 trillion has been wiped off the Shanghai and Shenzhen stock markets since their peak in mid-June 2015.

"Such a loss of wealth, even with short-lived paper gains, should have an impact on the economy, partly through margin-lending deals going sour as the sharemarket fell," NAB said.

When it comes to the impact of Chinese and Greek problems on Australia, NAB has not changed its forecasts for Australian growth – with GDP set to grow 2.4 per cent in 2014-15, 2.6 per cent in 2015-16 and three per cent in 2016-17.

"It is difficult to access the impact of recent international events such as Greece and more importantly China – on confidence and further falls in commodity price," the bank said.

Grexit risk 'muted': NAB
mortgagebusiness

Latest News

The federal government has committed an additional $130 billion in support to protect jobs threatened by the economic fallout from the cor...

New government-led interventions in the housing market in response to the coronavirus outbreak are set to further hinder transaction activit...

The number of owners withdrawing their property from auction soared to 40 per cent last week, following the introduction of a ban on auction...

FROM THE WEB
podcast

LATEST PODCAST: Further relief for SMEs and borrowers

Do you think Australia will move to quantitative easing this year?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

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