Australian Economy
In December Treasurer Joe Hockey revealed that the budget
deficit was most likely to be near $60 billion. In a $1.5 trillion
economy this works out at around 3%. In theory deficits can be good
for an economy when they make up for a shortfall in private demand
and provide the impetus for the private sector to grow at a faster
rate. Better to spend money stimulating job creation rather than
fund a larger number of unemployment benefits. Any budget deficit
adds to government debt but it is the type of government spending
that really matters.....
International Economy
The outlook for the international economy in 2014 has continued
to improve. The ongoing recovery in the two largest economies, the
United States and Japan, should assist a modest improvement in both
Europe and Emerging Markets. Of course the recovery in Europe
remains off a very low base and in reality much of the region
remains depressed.....
