Powered by MOMENTUM MEDIA
subscribe to our newsletter

Mixed outlook for Aussie economy, says NAB

Australia's economic outlook remains mixed, with employment growth improving but mining investment looking increasingly negative.

NAB's recent report, The Bigger Picture – A Global & Australian Economic Perspective, forecasts Australian GDP growth to reach 2.8 per cent in 2015-16 and 3.2 per cent in 2016-17.

According to the report, the pace of employment growth has strengthened, stabilising the unemployment rate between 6.0 per cent and 6.3 per cent over the past year.

The report noted there is increasing capacity utilisation, which suggests that 15,000 jobs are created per month. This is enough to keep pace with slower population growth, NAB said.

As a result, NAB expects the RBA to keep the cash rate on hold in 2015, before commencing a gradual tightening cycle in late 2016.

Advertisement
Advertisement

The report also found that consumer spending picked up moderately in the second quarter of 2015, particularly in June. NAB suggested that this partly reflects the recent budget initiatives implemented to encourage small-business spending.

“Against a backdrop of subdued household income growth, we expect a modest pick-up in consumer spending growth through to 2017, underpinned by a gradual decline in the household savings rate,” the report said.

The outlook for mining investment remained negative, with falls in commodity prices putting the viability of marginal projects in doubt.

“Mining investment is declining sharply, public spending is limited and national income growth is weak amidst declining commodity prices,” the report stated.

While dwelling investment is helping to mitigate losses in the commodity sector, its impact is limited due to its small share of GDP, at only five per cent.

PROMOTED CONTENT


Mixed outlook for Aussie economy, says NAB
mortgagebusiness

Latest News

Several lenders, including the major banks, have announced relief measures for Victorian borrowers impacted by the floods. ...

The major bank has forecast an RBA tightening in two steps in H2 2023 to take the official cash rate to 0.5 per cent by the end of 2023. ...

Housing-related consumer sentiment has plummeted by 27 per cent since November 2020, and is in pessimistic territory for the first time sinc...

How long do you think it should take to discharge a mortgage?

Website Notifications

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