Powered by MOMENTUM MEDIA
subscribe to our newsletter

Global economic risks ‘tilted to downside’: Treasury

The deterioration and heightened volatility within global equity and credit markets has made the world a riskier place in recent months, according to Treasury.

Speaking at a Committee for Economic Development of Australia event in Sydney last week, Treasury deputy secretary Nigel Ray said Australia cannot rely on a “resurgence” in the global economy.

“Global growth has struggled to regain sustained momentum post-global financial crisis, and global aggregate demand remains weak,” he said.

“This is despite monetary policy settings in nearly all of the major economies remaining extraordinarily accommodative, and global public debt increasing since the global financial crisis.

“Global risks are tilted to the downside and have intensified in recent months.”

Advertisement
Advertisement

Markets around the world have deteriorated in past months, and volatility has heightened, Mr Ray said.

“Markets seem to be questioning whether global growth will be strong enough to drive corporate earnings and maintain low default rates in order to sustain current valuations,” he said.

“In a lower growth, lower inflation world, there may well be continued heightened volatility on financial markets.”

The International Monetary Fund downgraded its forecast for global economic growth in its January update, Mr Ray said – the organisation’s 17th downgrade in five years.

“Slower global growth has been accompanied by a number of trends that are observable across the global economy: slower growth in trade, weak business investment, slower productivity growth, slower population growth in advanced economies, low inflation, and lower inflation expectations,” he said.

PROMOTED CONTENT


“More recently, we have observed that the convergence between emerging and advanced economies we have seen since the turn of the century is showing signs of stalling.

“If this occurs, it would affect the outlook for future global economic activity, and could have broader consequences.”

[Related: New dwellings boost GDP growth]

Global economic risks ‘tilted to downside’: Treasury
mortgagebusiness

Latest News

The Federal Court has ordered Westpac to pay an agreed $1.3 billion penalty for breaching anti-money laundering and counter-terrorism financ...

The major bank has hired internally to fill the position of head of corporate finance, international, a newly created role overseeing the c...

The ASX-listed bank has reported strong third-party-driven loan book growth over the first few months of the new financial year. ...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

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