subscribe to our newsletter
Economic risks remain 'tilted to the downside' for 2016

Economic risks remain 'tilted to the downside' for 2016

A global investment management group has published its 2016 outlook for the Australian economy.

Vanguard’s economic and investment outlook for next year highlighted the ongoing transition away from mining, with a volatile investment outlook on the cards.

“In Australia, risks remain tilted to the downside as the economy navigates a difficult transition from mining-led to broad-based growth,” the group said.

“A cyclical economic recovery is likely to emerge over comings years as the drag from mining investment fades. However, in our view this is unlikely until 2017 at the earliest,” it said.

Vanguard believes policymakers are likely to continue to face difficulties achieving two per cent inflation over the medium term. However, the group noted that as of this month, some of the most pernicious long-term deflationary forces are beginning to moderate cyclically for the first time since 2006.

“Going forward, the investment environment is likely to be more challenging and volatile,” the group said.

“Investors with an appropriate level of discipline, diversification, and patience are likely to be rewarded over the next decade with fair inflation-adjusted returns.”

[Related: Outlook stable, but headwinds rising for Asia-Pacific banks]

Economic risks remain 'tilted to the downside' for 2016
mortgagebusiness logo

Latest News

The expiry of the interest-only period is set to place 13 per cent of property investors in financial stress, according to new research. ...

Fiscal stability has helped reaffirm Australia’s AAA credit rating, which could come under pressure if the housing market experiences a sh...

The corporate watchdog is urging ASIC-regulated entities to submit business metrics into a new portal ahead of an impending deadline. ...

FROM THE WEB

podcast

LATEST PODCAST: How technology is merging the property and finance sectors

Is enough being done to ensure responsible lending?