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ARTICLE · 09 JULY 2014

Australian economy - future economic growth

On balance, the Australian economy remains reasonably well positioned to record further future growth in the short term.

AustraliaStrategy

Overview

Australia has enjoyed an uninterrupted run of twenty-three consecutive years of economic growth. All the more impressive given that this period was straddled by the Global Financial Crisis (GFC). Such an extraordinary feat involves a mix of good management and good fortune. This continues today perhaps in equal measure.

While the mining investment boom may have ended, the capacity expansion has translated into materially higher volumes that continue to drive exports. The Reserve Bank had been concerned about the end of the mining investment boom for some time and was hoping that lowering interest rates would help lift consumption to supplant the decline in investment. As if scripted, lower interest rates have led to appreciating asset prices (shares and residential property) that have indeed given households the confidence to spend once more.

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