The document provides an overview and analysis of macroeconomic forecasts for the Australian and global economies. It summarizes Telstra's internal forecasts for key indicators such as GDP growth, unemployment, inflation compared to market consensus. GDP growth is forecast to gradually increase to around 3% over the next few years, driven by export growth while domestic demand remains subdued. Unemployment is expected to peak at around 6.1% in 2016 before gradually declining. Inflation is forecast to remain below the RBA target band of 2-3% due to spare capacity and weak demand. Globally, growth is projected to modestly improve but remain below pre-crisis levels, with emerging markets facing greater downside risks than advanced economies.
1) The March quarter saw stronger than expected GDP growth of 1.1% quarter-on-quarter and 3.1% year-on-year, driven by net exports, consumer spending, and dwelling investment.
2) While headline GDP growth appears favorable, domestic economic activity outside of housing remains sluggish, with private demand and business investment declining.
3) The information, media, and telecommunications sector continues to outperform the broader economy, with annual growth of 5.5% compared to 3.1% for GDP overall, driven by technological developments and demand for data across fixed and mobile networks.
A piaci konszenzusnál erősebben, az OTP Bank Elemzési Központjának előrejelzésénél gyengébben alakult az első negyedéves GDP. Az adat megerősítette az OTP elemzőinek az idei év egészére vonatkozó 4%-os növekedési várakozását, a kockázatok felfelé mutatnak.
The document summarizes the global economic and labor market outlook for the first quarter of 2016. It finds that while developed markets are expected to see moderate GDP growth and steady job creation, emerging markets face greater challenges due to slowing growth in China, low commodity prices, and political/fiscal issues in countries like Brazil and Russia. Unemployment is projected to rise in many emerging markets but remain stable or gradually fall in developed nations. Moderate economic expansion is forecast for Europe, but Eastern European countries and those dependent on oil will struggle. Growth in major Asian economies is also expected to cool slightly, restraining hiring, while India remains the fastest growing large economy.
ChoiceBroking - Q2FY16 GDP growth at 7.4%; robust manufacturing expansion indicates revival in economic scenario. To read our monthly economic outlook please click here http://bit.ly/1QTqJKI
- The Vietnamese economy performed strongly in the first half of 2016 despite missing the GDP growth target, with consumption, investment, and trade numbers all being high.
- Inflation is expected to return to moderate levels in 2016, pushing the VN-Index stock market higher but potentially beyond fair valuation.
- While the GDP target will be difficult to reach, domestic demand and FDI inflows are forecasted to remain robust, supporting overall economic growth.
Kharif crop output for the recent harvest season was lower than last year for all crops except rice and jute, with total acreage sown down 2.3% due to poor timing of rains. Inflation rates remained high in August according to several indices, though wholesale price inflation is expected to ease to around 11% by year's end if oil prices do not spike again. The rupee has depreciated nearly 6% against the dollar in September and continues to face depreciation pressure due to high crude oil prices and domestic demand, with the currency expected to remain between 46-47.5 in the coming months.
1) The March quarter saw stronger than expected GDP growth of 1.1% quarter-on-quarter and 3.1% year-on-year, driven by net exports, consumer spending, and dwelling investment.
2) While headline GDP growth appears favorable, domestic economic activity outside of housing remains sluggish, with private demand and business investment declining.
3) The information, media, and telecommunications sector continues to outperform the broader economy, with annual growth of 5.5% compared to 3.1% for GDP overall, driven by technological developments and demand for data across fixed and mobile networks.
A piaci konszenzusnál erősebben, az OTP Bank Elemzési Központjának előrejelzésénél gyengébben alakult az első negyedéves GDP. Az adat megerősítette az OTP elemzőinek az idei év egészére vonatkozó 4%-os növekedési várakozását, a kockázatok felfelé mutatnak.
The document summarizes the global economic and labor market outlook for the first quarter of 2016. It finds that while developed markets are expected to see moderate GDP growth and steady job creation, emerging markets face greater challenges due to slowing growth in China, low commodity prices, and political/fiscal issues in countries like Brazil and Russia. Unemployment is projected to rise in many emerging markets but remain stable or gradually fall in developed nations. Moderate economic expansion is forecast for Europe, but Eastern European countries and those dependent on oil will struggle. Growth in major Asian economies is also expected to cool slightly, restraining hiring, while India remains the fastest growing large economy.
ChoiceBroking - Q2FY16 GDP growth at 7.4%; robust manufacturing expansion indicates revival in economic scenario. To read our monthly economic outlook please click here http://bit.ly/1QTqJKI
- The Vietnamese economy performed strongly in the first half of 2016 despite missing the GDP growth target, with consumption, investment, and trade numbers all being high.
- Inflation is expected to return to moderate levels in 2016, pushing the VN-Index stock market higher but potentially beyond fair valuation.
- While the GDP target will be difficult to reach, domestic demand and FDI inflows are forecasted to remain robust, supporting overall economic growth.
Kharif crop output for the recent harvest season was lower than last year for all crops except rice and jute, with total acreage sown down 2.3% due to poor timing of rains. Inflation rates remained high in August according to several indices, though wholesale price inflation is expected to ease to around 11% by year's end if oil prices do not spike again. The rupee has depreciated nearly 6% against the dollar in September and continues to face depreciation pressure due to high crude oil prices and domestic demand, with the currency expected to remain between 46-47.5 in the coming months.
The document provides an economic and labor market outlook for 2017 and beyond. It finds that while global economic growth is expected to improve slightly to 2.8% in 2017, significant risks remain from political uncertainties. Unemployment is projected to continue declining as growth improves in most major regions. Specifically:
- North American markets have positive outlooks for 2017, while Brazil and Venezuela will struggle with deep recessions. Labor markets in western Europe are improving but face challenges like youth unemployment.
- APAC is expected to outpace other regions, with steady job creation lowering unemployment. However, economic activity may temper in China and India.
- Developing the potential of young workers is important for countries' long-term
1) India's industrial production grew by 6.4% in August 2015, the fastest pace in nearly three years, driven by strong growth in the manufacturing and mining sectors.
2) Fifteen of twenty-two manufacturing industry groups showed positive growth in August, with capital goods output growing 21.8%, indicating rising investment. Consumer durable output expanded 17%.
3) For the first five months of the current fiscal year, manufacturing grew 4.6% compared to 2% in the year-ago period, showing improved demand as inflation has eased. Overall industrial growth was forecast to continue benefiting from lower oil prices and interest rates.
The International Air Transport Association (IATA) released data for global air freight markets showing that in August 2015 freight markets stabilized after two months of decline. Measured in Freight Tonne Kilometers, air cargo volumes rose 0.2% compared to the same month a year ago. This is a modest improvement on July performance when freight demand contracted by 0.6% year-over-year.
More like this on www.transportworldafrica.co.za
The global economic outlook has weakened in 2016 due to challenges including the UK's decision to leave the EU (Brexit) and recessions in several emerging markets such as Brazil and Russia. Global GDP growth projections for 2016 and 2017 have been lowered. The document analyzes economic and labor market trends and forecasts by region, finding subdued or slowing growth across Europe, North America, South America, and parts of Asia due to various country-specific factors. Uncertainty from events like Brexit is expected to further dampen the short-term economic outlook for some regions.
This document provides an overview of key economic indicators in India including the Index of Industrial Production (IIP) and Wholesale Price Index (WPI). It discusses the history and structure of the IIP, noting it measures industrial production compared to a base year. It also explains the WPI measures wholesale price movements weekly across primary articles, fuel, and manufactured goods. The document highlights how these indicators can provide insights into business environment trends and impact stock markets and economic sectors.
• Indian economy grew @5.3% in Jul-Sept 2014 quarter (YoY), lower than the 10-quarter high of 5.7% recorded in the previous quarter, but better than 4.7% in FY14 (Apr'13-Mar'14)
• Slow down due to lower Industrial (@ 2.2%) and Agricultural (@ 3.2%) growth during the quarter. But services sector grew @ 7.1%
• Private spending grew at 5.8%; Fixed Capital formation was flat; Government expenditure expanded @ 10.1%
• Economy is expected to grow @ 5.5% in FY15 and 6.5% in FY16 (FY:Apr-Mar)
• New government's policy decisions key to growth revival; Central bank is expected to cut policy rates by early CY2015
Highlights
• As last newsletter predicted, manufacturing recovery has begun.
• Yet, exports will continue to stay depressed, SMEs will take a while to feel the positive swing.
• Prospects for emerging economies brighten, capital flows in.
• Inflows are notoriously fickle, so watch out for any turnaround if political factors disappoint.
India: Kal, aaj aur kal
The numbers are coming in clearer every month as Indian manufacturing recovers, thanks to strong domestic demand, due in large part to money from the pay commission, NREGS, high support prices for agri products last year etc. The fiscal stimulus began much before the global crisis hit India. We are not in anyway close to double digit growth, but the slump does seem to be over. Meanwhile, the stock market believes that all is well with the world, which isn’t true, of course, and if the election outcome disappoints in a fractured mandate, expect a rude shock once again.
Mercer Capital's Value Focus: Real Estate Industry | Q4 2015 | Segment Focus:...Mercer Capital
Mercer Capital's Real Estate Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes a macroeconomic trends, industry trends, and guideline public company metrics.
The document provides an economic outlook for Belgium and the world. It summarizes that:
1) The global economy remains positive, led by steady growth in the US, while China's economy is slowing and concerns exist over emerging markets.
2) The Belgian economy continues growing with rising confidence indicators and increased labour market dynamics.
3) Positive labour market conditions are likely to strengthen the activities of Federgom members, represented by a trade association.
Highlights
• 6.1% growth in 2009-10Q1, drought restricts potential ahead
• Construction and services power growth while manufacturing picks up
• Need to target rabi crop as monsoon deficit stands currently at 25%
• Growth estimated at 6.6% this fiscal, inflation bigger worry
• While food price pressure will ease by winter, commodities set to rise e.g steel
India: Kal, aaj aur kal
Throughout the gloom of last year, we have been optimistic about the growth in India, our estimates of more than 6% growth this year were amongst the highest while finance whizzes were busy forecasting dire numbers in the range of 4-6%. In our January newsletter we had said that by the second half of this year, there would be an overall improvement. We had also cautioned that a deflationary situation that was being discussed was of little import here where inflation would be the prime worry. As the months passed and the revival became more apparent, estimates were rapidly revised upwards, both of growth and inflation. Though some find this surprising, we maintain, that this was all predictable, as was the downturn, and as is the inflationary environment in coming months.
As we go ahead, growth will show ‘surprising’ levels, e.g. the IIP numbers can get close to 10% - on the back of low base of last year, electricity and mining are doing better this year, vehicle sales are soaring with domestic festival demand etc. We see no reason to cheer though. The past year has taken a heavy toll on the finances of the government and investment plans in the private sector, consumer confidence has also been hit hard, while inflation has eaten gaping holes in the common man’s wallet. Moreover, the true impact of the poor monsoon will be known only by the year end. The financial sector types meanwhile are having a field day once more, rapidly pushing up spirits and stock markets. Some are even getting into debates on whether this slowdown would take the shape of a V, U, W, or the Riemann’s zeta function, as Bloomberg columnist Moynihan quipped.
It is important to remember though that the ‘green shoots’ which are growing tall now have sprung up in response to fiscal stimuli and rate cuts worldwide, not through any change in fundamental factors. Work is on towards changing standards of regulation and supervision internationally, but these will take time to be implemented. In the meanwhile, we have to point out that we are now tired of stressing on one issue - that such high levels of expenditures, in India and abroad, are inflationary whatever way one tries to handle it. Expectedly, the rational components of financial markets recognize this problem and we are seeing significant upward pressure on interest rates. This is a natural outcome of government over-spending.
There is a possibility that to get around this problem this government may try to borrow from abroad. And if that happens on a large enough scale, the final degree of freedom that the government will have, would have been used up. We therefore do not support such an initiative, despite its short term advantages of keeping upward interest rate pressures under check. Note that India has done something similar in the past (during the Rajiv Gandhi years) when it borrowed internationally and spent on unproductive activities. For a few years things looked very good, but pressures were building. The ruling conglomeration in the post Rajiv Gandhi years just did not have the ability to handle the pressures so generated. We all know the final outcome.
At the end of the day we cannot spend this much without paying for it one way or another. And it is better to pay by way of lower investment, higher interest and prices, rather than macro-economic instability. But the first best solution remains the same - don’t spend on unproductive activities please.
PS. Please visit our new homepage for interactive time series graphs of economic indicators
The CII ASCON survey results for the quarter, January - March FY16, reveals an improvement in growth trends in terms of production in the Q4 FY16 quarter over the corresponding quarter a year ago. The current trends also point towards a bottoming out of growth trends in the majority of sectors.
The CII ASCON Industry Survey found diverging growth trends in Q2 FY17 compared to the same quarter last year. The share of sectors with excellent growth (>20%) increased from 7.5% to 15.1%, while sectors with high growth (10-20%) declined slightly from 16.1% to 15.1%. Meanwhile, sectors with moderate growth (0-10%) fell from 46.2% to 29.0%, and sectors with low growth (<0%) rose from 30.1% to 40.9%. Overall, growth remains concentrated in a few sectors rather than broad-based. Going forward, continued urban consumption and rural revival could boost sector growth and revive private investment.
The global economy is growing slowly with diverging growth rates between countries. Financial risks are increasing and volatility is likely to rise. Potential growth has declined as weak demand interacts with slowing growth rates. The euro area economy remains weak, a major concern. Coordinated monetary, fiscal and structural policies will need to be deployed to mitigate risks and boost growth.
Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.
In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.
Cowry market review for 2015 and outlook for 2016Tobi Ajayi
The document provides a review of the Nigerian economy and outlook for 2016. In 2015, real GDP growth slowed in the first two quarters but picked up to 2.84% in Q3 as crude oil production increased under the new administration. However, lower global oil prices reduced oil revenues. Manufacturing was neutral with expansion in production and orders offset by weakened demand and employment contraction. Foreign exchange scarcity also negatively impacted trade. While inflation remained in single digits, the currency depreciated due to declining reserves.
- GDP growth in the UK has slowed slightly in 2015 compared to 2014, with quarterly growth of 0.5% in Q3 2015. Private consumption and investment have remained robust drivers of growth.
- Annual inflation has remained close to zero for most of 2015, driven by falling goods prices, while services inflation has remained around 2.5%.
- The UK labor market continues to strengthen, with record high employment, falling unemployment, and a declining inactivity rate, indicating further tightening in the labor market.
The document provides an economic outlook for 2016, predicting lower global economic growth and more economic turbulence. It notes weaker growth in western economies due to low oil prices, but emerging markets will be more severely impacted. There will be more uncertainty and volatility in the global economy. Key risks include a potential crisis in the Eurozone, fragile emerging market economies like China and Brazil, and the timing of interest rate increases by central banks. Overall, the global economy will see slower growth with more uncertainty in 2016.
Griffon quarterly report - Iran's Macro Economics dashboard - March 2017Griffon Capital
This document provides a quarterly macroeconomic dashboard report from Griffon Asset Management covering Iran. Some key points:
- GDP growth for the first nine months of the Iranian fiscal year was 7.2%, driven primarily by an 85.4% growth in the oil sector. Other sectors like services, agriculture and industry also saw growth.
- Inflation declined from a peak of around 45% in 2013 to 8.6% recently due to better fiscal and monetary management. Producer price inflation has bottomed out in the short-term around 4.5%.
- Unemployment remains high at 12.5%, particularly among youth at 28.1%, though labor participation rates have increased, showing more
1) GDP growth in the UK slowed to 0.4% in Q3 2015, down from a previous estimate of 0.5%, with growth averaging 0.5% in the first three quarters of 2015.
2) Household consumption has been the main driver of GDP growth over the past year, while net trade and private housing investment have dragged on growth.
3) The UK's household saving ratio fell to 4.4% in Q3 2015, its lowest level since early 2010, as consumption growth has outpaced income growth in recent years.
The document discusses the benefits of meditation for reducing stress and anxiety. Regular meditation practice can help calm the mind and body by lowering heart rate and blood pressure. Studies have shown that meditating for just 10-20 minutes per day can have significant positive impacts on both mental and physical health over time.
The document provides an economic and labor market outlook for 2017 and beyond. It finds that while global economic growth is expected to improve slightly to 2.8% in 2017, significant risks remain from political uncertainties. Unemployment is projected to continue declining as growth improves in most major regions. Specifically:
- North American markets have positive outlooks for 2017, while Brazil and Venezuela will struggle with deep recessions. Labor markets in western Europe are improving but face challenges like youth unemployment.
- APAC is expected to outpace other regions, with steady job creation lowering unemployment. However, economic activity may temper in China and India.
- Developing the potential of young workers is important for countries' long-term
1) India's industrial production grew by 6.4% in August 2015, the fastest pace in nearly three years, driven by strong growth in the manufacturing and mining sectors.
2) Fifteen of twenty-two manufacturing industry groups showed positive growth in August, with capital goods output growing 21.8%, indicating rising investment. Consumer durable output expanded 17%.
3) For the first five months of the current fiscal year, manufacturing grew 4.6% compared to 2% in the year-ago period, showing improved demand as inflation has eased. Overall industrial growth was forecast to continue benefiting from lower oil prices and interest rates.
The International Air Transport Association (IATA) released data for global air freight markets showing that in August 2015 freight markets stabilized after two months of decline. Measured in Freight Tonne Kilometers, air cargo volumes rose 0.2% compared to the same month a year ago. This is a modest improvement on July performance when freight demand contracted by 0.6% year-over-year.
More like this on www.transportworldafrica.co.za
The global economic outlook has weakened in 2016 due to challenges including the UK's decision to leave the EU (Brexit) and recessions in several emerging markets such as Brazil and Russia. Global GDP growth projections for 2016 and 2017 have been lowered. The document analyzes economic and labor market trends and forecasts by region, finding subdued or slowing growth across Europe, North America, South America, and parts of Asia due to various country-specific factors. Uncertainty from events like Brexit is expected to further dampen the short-term economic outlook for some regions.
This document provides an overview of key economic indicators in India including the Index of Industrial Production (IIP) and Wholesale Price Index (WPI). It discusses the history and structure of the IIP, noting it measures industrial production compared to a base year. It also explains the WPI measures wholesale price movements weekly across primary articles, fuel, and manufactured goods. The document highlights how these indicators can provide insights into business environment trends and impact stock markets and economic sectors.
• Indian economy grew @5.3% in Jul-Sept 2014 quarter (YoY), lower than the 10-quarter high of 5.7% recorded in the previous quarter, but better than 4.7% in FY14 (Apr'13-Mar'14)
• Slow down due to lower Industrial (@ 2.2%) and Agricultural (@ 3.2%) growth during the quarter. But services sector grew @ 7.1%
• Private spending grew at 5.8%; Fixed Capital formation was flat; Government expenditure expanded @ 10.1%
• Economy is expected to grow @ 5.5% in FY15 and 6.5% in FY16 (FY:Apr-Mar)
• New government's policy decisions key to growth revival; Central bank is expected to cut policy rates by early CY2015
Highlights
• As last newsletter predicted, manufacturing recovery has begun.
• Yet, exports will continue to stay depressed, SMEs will take a while to feel the positive swing.
• Prospects for emerging economies brighten, capital flows in.
• Inflows are notoriously fickle, so watch out for any turnaround if political factors disappoint.
India: Kal, aaj aur kal
The numbers are coming in clearer every month as Indian manufacturing recovers, thanks to strong domestic demand, due in large part to money from the pay commission, NREGS, high support prices for agri products last year etc. The fiscal stimulus began much before the global crisis hit India. We are not in anyway close to double digit growth, but the slump does seem to be over. Meanwhile, the stock market believes that all is well with the world, which isn’t true, of course, and if the election outcome disappoints in a fractured mandate, expect a rude shock once again.
Mercer Capital's Value Focus: Real Estate Industry | Q4 2015 | Segment Focus:...Mercer Capital
Mercer Capital's Real Estate Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes a macroeconomic trends, industry trends, and guideline public company metrics.
The document provides an economic outlook for Belgium and the world. It summarizes that:
1) The global economy remains positive, led by steady growth in the US, while China's economy is slowing and concerns exist over emerging markets.
2) The Belgian economy continues growing with rising confidence indicators and increased labour market dynamics.
3) Positive labour market conditions are likely to strengthen the activities of Federgom members, represented by a trade association.
Highlights
• 6.1% growth in 2009-10Q1, drought restricts potential ahead
• Construction and services power growth while manufacturing picks up
• Need to target rabi crop as monsoon deficit stands currently at 25%
• Growth estimated at 6.6% this fiscal, inflation bigger worry
• While food price pressure will ease by winter, commodities set to rise e.g steel
India: Kal, aaj aur kal
Throughout the gloom of last year, we have been optimistic about the growth in India, our estimates of more than 6% growth this year were amongst the highest while finance whizzes were busy forecasting dire numbers in the range of 4-6%. In our January newsletter we had said that by the second half of this year, there would be an overall improvement. We had also cautioned that a deflationary situation that was being discussed was of little import here where inflation would be the prime worry. As the months passed and the revival became more apparent, estimates were rapidly revised upwards, both of growth and inflation. Though some find this surprising, we maintain, that this was all predictable, as was the downturn, and as is the inflationary environment in coming months.
As we go ahead, growth will show ‘surprising’ levels, e.g. the IIP numbers can get close to 10% - on the back of low base of last year, electricity and mining are doing better this year, vehicle sales are soaring with domestic festival demand etc. We see no reason to cheer though. The past year has taken a heavy toll on the finances of the government and investment plans in the private sector, consumer confidence has also been hit hard, while inflation has eaten gaping holes in the common man’s wallet. Moreover, the true impact of the poor monsoon will be known only by the year end. The financial sector types meanwhile are having a field day once more, rapidly pushing up spirits and stock markets. Some are even getting into debates on whether this slowdown would take the shape of a V, U, W, or the Riemann’s zeta function, as Bloomberg columnist Moynihan quipped.
It is important to remember though that the ‘green shoots’ which are growing tall now have sprung up in response to fiscal stimuli and rate cuts worldwide, not through any change in fundamental factors. Work is on towards changing standards of regulation and supervision internationally, but these will take time to be implemented. In the meanwhile, we have to point out that we are now tired of stressing on one issue - that such high levels of expenditures, in India and abroad, are inflationary whatever way one tries to handle it. Expectedly, the rational components of financial markets recognize this problem and we are seeing significant upward pressure on interest rates. This is a natural outcome of government over-spending.
There is a possibility that to get around this problem this government may try to borrow from abroad. And if that happens on a large enough scale, the final degree of freedom that the government will have, would have been used up. We therefore do not support such an initiative, despite its short term advantages of keeping upward interest rate pressures under check. Note that India has done something similar in the past (during the Rajiv Gandhi years) when it borrowed internationally and spent on unproductive activities. For a few years things looked very good, but pressures were building. The ruling conglomeration in the post Rajiv Gandhi years just did not have the ability to handle the pressures so generated. We all know the final outcome.
At the end of the day we cannot spend this much without paying for it one way or another. And it is better to pay by way of lower investment, higher interest and prices, rather than macro-economic instability. But the first best solution remains the same - don’t spend on unproductive activities please.
PS. Please visit our new homepage for interactive time series graphs of economic indicators
The CII ASCON survey results for the quarter, January - March FY16, reveals an improvement in growth trends in terms of production in the Q4 FY16 quarter over the corresponding quarter a year ago. The current trends also point towards a bottoming out of growth trends in the majority of sectors.
The CII ASCON Industry Survey found diverging growth trends in Q2 FY17 compared to the same quarter last year. The share of sectors with excellent growth (>20%) increased from 7.5% to 15.1%, while sectors with high growth (10-20%) declined slightly from 16.1% to 15.1%. Meanwhile, sectors with moderate growth (0-10%) fell from 46.2% to 29.0%, and sectors with low growth (<0%) rose from 30.1% to 40.9%. Overall, growth remains concentrated in a few sectors rather than broad-based. Going forward, continued urban consumption and rural revival could boost sector growth and revive private investment.
The global economy is growing slowly with diverging growth rates between countries. Financial risks are increasing and volatility is likely to rise. Potential growth has declined as weak demand interacts with slowing growth rates. The euro area economy remains weak, a major concern. Coordinated monetary, fiscal and structural policies will need to be deployed to mitigate risks and boost growth.
Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.
In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.
Cowry market review for 2015 and outlook for 2016Tobi Ajayi
The document provides a review of the Nigerian economy and outlook for 2016. In 2015, real GDP growth slowed in the first two quarters but picked up to 2.84% in Q3 as crude oil production increased under the new administration. However, lower global oil prices reduced oil revenues. Manufacturing was neutral with expansion in production and orders offset by weakened demand and employment contraction. Foreign exchange scarcity also negatively impacted trade. While inflation remained in single digits, the currency depreciated due to declining reserves.
- GDP growth in the UK has slowed slightly in 2015 compared to 2014, with quarterly growth of 0.5% in Q3 2015. Private consumption and investment have remained robust drivers of growth.
- Annual inflation has remained close to zero for most of 2015, driven by falling goods prices, while services inflation has remained around 2.5%.
- The UK labor market continues to strengthen, with record high employment, falling unemployment, and a declining inactivity rate, indicating further tightening in the labor market.
The document provides an economic outlook for 2016, predicting lower global economic growth and more economic turbulence. It notes weaker growth in western economies due to low oil prices, but emerging markets will be more severely impacted. There will be more uncertainty and volatility in the global economy. Key risks include a potential crisis in the Eurozone, fragile emerging market economies like China and Brazil, and the timing of interest rate increases by central banks. Overall, the global economy will see slower growth with more uncertainty in 2016.
Griffon quarterly report - Iran's Macro Economics dashboard - March 2017Griffon Capital
This document provides a quarterly macroeconomic dashboard report from Griffon Asset Management covering Iran. Some key points:
- GDP growth for the first nine months of the Iranian fiscal year was 7.2%, driven primarily by an 85.4% growth in the oil sector. Other sectors like services, agriculture and industry also saw growth.
- Inflation declined from a peak of around 45% in 2013 to 8.6% recently due to better fiscal and monetary management. Producer price inflation has bottomed out in the short-term around 4.5%.
- Unemployment remains high at 12.5%, particularly among youth at 28.1%, though labor participation rates have increased, showing more
1) GDP growth in the UK slowed to 0.4% in Q3 2015, down from a previous estimate of 0.5%, with growth averaging 0.5% in the first three quarters of 2015.
2) Household consumption has been the main driver of GDP growth over the past year, while net trade and private housing investment have dragged on growth.
3) The UK's household saving ratio fell to 4.4% in Q3 2015, its lowest level since early 2010, as consumption growth has outpaced income growth in recent years.
The document discusses the benefits of meditation for reducing stress and anxiety. Regular meditation practice can help calm the mind and body by lowering heart rate and blood pressure. Studies have shown that meditating for just 10-20 minutes per day can have significant positive impacts on both mental and physical health over time.
This discussion group presentation from the British High Commissioner to Australia summarized opportunities for UK infrastructure investment. It highlighted the UK's competitive tax and growth environment and experience with over 730 private finance initiative projects. It outlined the national infrastructure plan's vision and £250 billion pipeline of projects seeking private capital. Examples were provided of Australian institutional investors already active in UK infrastructure. Additional funding routes and policy measures like the UK Guarantees Scheme and Green Investment Bank were also summarized.
Este documento descreve uma lei estadual que estabelece diretrizes para apoiar o cooperativismo em Minas Gerais, incluindo a criação de um Conselho Estadual do Cooperativismo e um fundo de apoio. O documento também define os princípios e estrutura das cooperativas no estado.
This document summarizes a study examining the impact of monetary policy on economic growth in Pakistan from 1991 to 2011. It finds that inflation rate, exchange rate, and external reserves are significant monetary policy instruments that influence growth. It recommends establishing primary and secondary government bond markets to increase monetary policy efficiency and reduce reliance on the central bank. The document provides context on monetary policy objectives in Pakistan and reviews literature on the relationship between monetary policy and economic growth.
The document discusses monetary and fiscal policies used to address inflation. It defines inflation and describes its stages and types. The causes of demand-pull and cost-push inflation are explained. Effects of inflation and instruments of monetary policy like bank rate, cash reserve ratio, and open market operations are summarized. Key differences between monetary and fiscal policy are highlighted. Objectives of monetary policy to maintain price stability and credit flow are stated.
15 interest rates and monetary policy newagjohnson
This chapter discusses monetary policy and how central banks like the Federal Reserve influence interest rates and the money supply. It covers the demand for and supply of money, how the Fed uses tools like open market operations and adjusting interest rates to affect the federal funds rate. It then explains how changes in monetary policy can influence aggregate demand, GDP, and inflation in the economy. The chapter also discusses some advantages and challenges of monetary policy.
This document provides an overview of monetary policy and inflation in Pakistan. It discusses key topics such as:
1) The different stages and types of inflation including creeping, walking, running, and hyper inflation.
2) The causes of inflation including demand-pull and cost-push factors.
3) The objectives, instruments and how monetary policy differs from fiscal policy in Pakistan.
4) The instruments of monetary policy used by the State Bank of Pakistan to control inflation including bank rate, cash reserve ratio, open market operations, and others.
Monetary policy aims to control the money supply and interest rates to achieve goals like full employment and price stability. The State Bank of Pakistan (SBP) uses various quantitative and qualitative tools of monetary policy like open market operations, bank rates, and credit ceilings. SBP targets money supply levels and interest rates. Over the years, SBP has implemented both tight and easy monetary policies in response to economic conditions - tightening in periods of high inflation and easing to encourage growth. SBP faces challenges in balancing objectives of inflation, growth, and payments stability but aims to improve forecasting, understand policy transmission, and increase transparency.
This document discusses contemporary human resource management (HRM) practices. It begins by stating that HR is the most important asset for achieving competitive advantage. It then discusses insights into HR, including that attracting and retaining talent is critical in today's dynamic business environment. The document outlines different types of HRM practices like employment security and self-managed teams. It also discusses factors that affect HRM practices, both internal factors like organization structure, and external factors like legislation and globalization. The document claims that effective HRM practices can enhance organizational performance. It provides examples of contemporary practices used by different organizations and concludes that HRM practices should be regularly analyzed and updated based on employee feedback.
The document discusses monetary policy in India. It begins by defining monetary policy as the process by which a central bank like the Reserve Bank of India controls money supply to maintain price stability and economic growth. It then outlines the objectives of India's monetary policy and the major monetary policy tools and operations used by RBI like cash reserve ratio, statutory liquidity ratio, and bank rate. It further discusses the role of monetary policy in developing economies like India and some obstacles to effective monetary policy implementation. Finally, it notes some recent changes to RBI's monetary policy approach including using multiple indicators instead of just money supply targets and reducing required reserve ratios to boost lending.
IKEA is a Swedish multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories. It is known for its innovative HR practices that focus on flexibility, employee development and benefits. Key practices include flexible work schedules, on-site childcare, tuition reimbursement and extensive training programs. These practices enhance work-life balance, motivation and commitment resulting in low turnover.
The document summarizes the main monetary policy tools of the Federal Reserve:
1) Open market operations where the Fed buys and sells government securities to increase or decrease the monetary base and influence interest rates. This is the most direct way to impact the money supply.
2) Reserve requirements where adjusting the percentage of deposits banks must keep impacts how much they can lend. Higher requirements reduce lending while lower requirements increase it.
3) Discount window lending where the Fed lends reserves to banks at the discount rate to meet depositors' demands or reserve requirements. The Fed can raise or lower the discount rate to slow or stimulate economic activity.
State Bank Of Pakistan (SBP)- Monetary PolicySalma Bashir
The State Bank of Pakistan (SBP) is the central bank of Pakistan and is charged with the duty to "regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in Pakistan and generally to operate the currency and credit system of the country to its advantage".
Monetary Policy According to the Reserve Bank of AustraliaJonathon Flegg
A short presentation on the unique aspects of inflation-targeting by the Reserve Bank of Australia. Compared with other inflation-targeting Central Banks, the RBA is to have low independence from the Government. The strong focus on credibility, transparency and flexibility allows the RBA to smooth volatility in the real economy and to occasionally target asset prices.
Monetary Policy According to the Reserve Bank of AustraliaJonathon Flegg
This document discusses monetary policy according to the Reserve Bank of Australia (RBA). It provides background on the RBA's transition to inflation targeting in the early 1990s. The RBA developed a unique framework characterized by credibility, transparency, and flexibility, with a target of 2-3% inflation on average over the business cycle. While the RBA has flexibility in its target, it has comparatively less political independence than other central banks. The document examines the RBA's pioneering role in inflation targeting and how its framework has helped anchor inflation expectations and promote macroeconomic stability in Australia.
Australia is a large island continent with diverse landscapes ranging from the Outback to coastal regions. The population is concentrated along the eastern and southern coasts near major cities like Sydney. While Australia has a predominantly European cultural identity, it also recognizes its Indigenous population and increasing Asian influences. The economy relies on exports of natural resources and tourism, though it was impacted by the global financial crisis. Overall, Australia maintains a highly developed economy and stable democratic government within a diverse, multicultural society.
Country Report > Aumento de la insolvencia en la zona NAFTAIgnacio Jimenez
The document provides economic indicators and forecasts for Canada, Mexico, and the USA. It summarizes key data on GDP growth, inflation, consumption, investment, exports and other indicators. It also analyzes economic trends and risks in each country, with a focus on potential impacts of a new US administration on Canada and Mexico through changes to trade policies or NAFTA. Business sectors in each country are also rated on their relative credit risk and performance outlook.
During ICCI's May Business Lunch, keynote speaker Antony Kelly shared with our business community key insights on end of the financial year main figures.
Az eddig beérkezett adatok alapján akár 5%-kal is nőhetett a hazai GDP az első negyedévben. Az év első felében nagyon erős dinamikára számítunk, a második félévben azonban az egyre intenzívebb import-kereslet és bázishatás miatt már lassulni fog a gazdaság bővülése, 2019-ben pedig 3%-ig mérséklődhet a növekedési ütem.
The SA freight industry during the Super Cycle downturnTristan Wiggill
Economist Mike Schussler delivered a presentation on the South African economy in a new world Super Cycle during the annual Road Freight Convention in Limpopo, South Africa.
This document provides a summary of economic indicators and forecasts for Canada, Mexico, and the USA. For Canada, key points are that real GDP growth is expected to slow to 1% in 2015 due to lower oil prices, but rebound to 2% in 2016. Private consumption growth is forecast to remain subdued at 1.9% in 2015. Industrial production is predicted to contract 1.3% in 2015 while fixed investment decreases 2.7% due to reductions in the energy sector. Government debt as a percentage of GDP is projected to rise to 73.5% in 2015. For Mexico, GDP growth is forecast to be 2.3% in 2015 and 2.8% in 2016. Inflation is estimated at
AS/COA
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Registration: 8:30 a.m. to 9:00 a.m.
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AS/COA, ANBIMA, and BRAiN held an on-the-record presentation by Joaquim Levy, Minister of Finance of Brazil.
Welcoming Remarks:
Randy Melzi, Senior Director, Public Policy Programs and Corporate Relations, AS/COA
José Carlos Doherty, Director, BRAiN; Head, ANBIMA
Speaker:
Joaquim Levy, Minister of Finance, Brazil
Download the presentation.
Event Information: Diogo Ide | dide@as-coa.org | 212-277-8352
COA Corporate Membership: Monica Vieira | mvieira@as-coa.org | 212-277-8344
Press Inquiries: Adriana La Rotta | alarotta@as-coa.org | 212-277-8384
PPT da Palestra do ministro Joaquim Levy em Nova Iorque portaldabetania
This document provides an outlook for Brazil in 2015. It summarizes that fiscal slippage was significant in 2014 but is being corrected through adjustments to spending and revenues. It also notes that while the current account deficit has widened, foreign direct investment remains strong. Overall, it expresses optimism that Brazil has not wasted its commodities bonus and has the means to make necessary adjustments to foster new growth, with improved fiscal indicators and increases in productivity.
Informe País principales mercados Europeos- Mayo 2016Ignacio Jimenez
This document provides a country report on the main Western European markets in May 2016. It includes individual sections on 12 countries: Austria, Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Spain, Sweden, Switzerland, and the United Kingdom. Each country section includes information on key economic indicators for 2013-2017, their main export and import partners, industry forecasts, and the insolvency environment. The report indicates that most Western European economies are expected to see modest GDP growth in 2016 and 2017, while corporate insolvency levels are forecast to decline slightly or remain elevated in some countries.
The OECD interim global economic assessment provides the following key points:
- Global growth prospects have improved slightly compared to previous forecasts due to stronger data, lower oil prices, and monetary easing.
- However, risks remain from inconsistent inflation and interest rates, rapid moves in asset prices, and lagging investment and employment.
- Policymakers need balanced policy packages including stable fiscal policies, reinvigorated structural reforms, and reduced reliance on monetary policy.
Presentation to jelf employee benefits seminar 13 july 2015Mark Beatson
The UK economy is expected to see sustained but modest growth over the next five years, with further employment increases and some tightening in the labour market. However, real wage growth is unlikely unless productivity recovers from its below-pre-recession levels. Additional fiscal consolidation is anticipated in the public sector, while employment growth will be concentrated among workers over 50. Demand will be strongest for high-skilled jobs, but questions remain about the UK's skills supply matching these requirements.
State of economy - economic survey of India 2013-14Swapnil Soni
The document provides an economic survey of India for 2013-14 prepared by the Ministry of Finance. It analyzes key economic indicators such as GDP growth, production, prices, external trade and debt, monetary trends, and government finances. Some highlights include:
- Real GDP growth slowed to 4.5% in 2013-14, the second successive year of sub-5% growth.
- Inflation remained above target levels and food inflation was a major contributor to overall inflation.
- Exports grew 4.1% in 2013-14 while imports declined 8.3%, improving the current account deficit.
- The survey identifies structural constraints like low manufacturing and agricultural productivity that are hampering the growth potential of
The document summarizes Mongolia's macroeconomic policies in response to balance of payments shocks and after economic adjustment. It discusses:
1. Mongolia implemented countercyclical monetary and fiscal policies to ensure stability during a 2013 balance of payments shock, maintaining balanced economic growth.
2. In response, Mongolia absorbed shock impacts through exchange rate flexibility and reserves while implementing economic stimulus measures and reforms.
3. Going forward, Mongolia aims to maintain a prudent and stable macroeconomic policy mix of fiscal discipline and flexible, non-inflationary monetary policy to support sustainable growth.
The document summarizes Mongolia's macroeconomic policies in response to balance of payments shocks and after economic adjustment. It discusses:
1. Mongolia implemented countercyclical monetary and fiscal policies to ensure stability during a 2013 balance of payments shock, maintaining balanced economic growth.
2. In response, Mongolia absorbed shock impacts through exchange rate flexibility and reserves while implementing economic stimulus measures and reforms.
3. Going forward, Mongolia aims to maintain a prudent and stable macroeconomic policy mix of fiscal discipline and flexible, non-inflationary monetary policy to support sustainable growth.
The U.S. economy is improving at a modest but positive pace, and business experts expect that trend to continue into next year and beyond. This was a theme echoed by several speakers Oct. 3 at a McCombs event called “The Economy in 2014: The Year of the Rebound?”
See the summary and video: The U.S. economy is improving at a modest but positive pace, and business experts expect that trend to continue into next year and beyond. This was a theme echoed by several speakers Oct. 3 at a McCombs event called “The Economy in 2014: The Year of the Rebound?” - See the summary and video: http://www.texasenterprise.utexas.edu/2013/10/17/finance/2014-year-rebound
Highlights
Jay Hartzell, professor of finance, University of Texas at Austin McCombs School of Business
“There are roughly three ways to get out of the debt problem: You grow your way out, you tax your way out, or you print money,” Hartzell said. “The growth forecast is not very strong for the next few years. It’s not clear we have the political will to tax our way out of it. So that leaves inflation, which many people have concerns about.”
Tyson Tuttle, CEO of Silicon Labs
Tuttle said a surge in investment in connected smart devices is driving a transformation of the tech industry. He expects low-cost, low-power devices to enable home and industrial automation, development of efficient smart grid and mobile technologies, and the advent of “big data.” “All of this is going to be enabled by new types of devices, chips and applications that people haven’t even thought of before."“This is going to create a lot of opportunities for startups, software creators, infrastructure providers, and certainly in our world.”
Daniel Nelson, CEO and founder of Datical
“By the end of 2014, there will be a glut of failed startups — and this is a really good thing, because they’re supposed to fail. The real question is, after those startups fail, what do those founders do?” Nelson said. “The virtuous cycle of entrepreneurism starts with failure. It starts with failing, learning, and trying again — and then failing, learning, and trying again.
Dennis McWilliams, CEO and founder of Apollo Endosurgery
“No other state, even California and New York, can compare to the resources we have in Texas for early-stage investment in new technologies,” McWilliams said. “We really are becoming a global economy of healthcare, and innovation that’s happening here in Texas is moving around the world.”
The Economic Survey projects India's GDP growth to increase to 7.6% in 2012-13 and 8.6% in 2013-14, however these projections are considered ambitious. Fiscal consolidation is seen as key to achieving this level of growth. Industrial output growth remains a concern, with only a marginal recovery seen and doubts about sustainability. While exports are slowing, the global situation remains difficult and could lead to increased protectionism. Overhauling FDI policy by addressing sectoral issues is recommended to boost growth.
This document summarizes Indonesia's 2018 budget and macroeconomic outlook. It notes that Indonesia's economy remains stable with GDP growth of around 5% despite global uncertainties. The 2018 budget projects lower deficit of 2.19% of GDP compared to 2017 and maintains debt financing below 30% of GDP. Revenue projections are based on recent tax performance while expenditures focus on improving efficiency and priority programs. Fiscal decentralization is strengthened through transfers to regions based on poverty, performance, and local resource optimization.
Macroenomic Policy Coordination: Beyond StabilityAbdul Hadi Ilman
The document summarizes Indonesia's macroeconomic conditions and policy coordination challenges. It notes that while China's economic growth remains sizable, Indonesia should also focus on opportunities in ASEAN. Household consumption is the main driver of Indonesia's GDP growth, but investment and exports have weakened. Maintaining high growth will require increasing savings or improving productivity. Fiscal and monetary policies face limitations, and government spending must avoid crowding out private investment. Commodity prices and global growth remain uncertain. Coordinating policies across sectors is important for sustainable growth and stability.
The document provides an economic forecast and analysis from Euromonitor International for Q3 2017. Some key points:
- The global economy is forecast to grow 3.5% in both 2017 and 2018, below pre-crisis levels. Emerging markets will drive most global growth.
- The Eurozone economy is outperforming expectations, with growth forecasts raised to 1.8% in 2017 and 1.7% in 2018 due to improved labor markets and sentiment.
- Growth forecasts for several countries were revised, including increases for Mexico, Canada, and decreases for India based on recent economic performance and risks.
- In the US, growth is forecast to remain around 2% annually through 2019
The UK economy experienced strong growth in 2018, with the fastest growth in the OECD. Unemployment is at its lowest level since 1975. However, the UK also has the highest government debt as a percentage of GDP in the world. Business investment has declined recently due to uncertainties surrounding Brexit.
Similar to Economic Forecasts - Dec. 2015-Jan. 2016 (20)
2. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
2MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
SUMMARY OF KEY ECONOMIC FORECASTS
Source: Australian Bureau of Statistics; RBA; OECD, EIU; IMF; various commercial banks forecasts; Economics@Telstra.
The latest internal forecasts for key macroeconomic variables are
compared and contrasted with the current market consensus view:
2015-16e 2016-17f 2017-18f 2018-19f
Telstra 2.6% 2.9% 3.1% 2.9%
Market 2.3%-2.7% 2.7%-3.2% - -
Real GDP Growth: Under the auspices of low interest rates and a low A$,
modest improvement in the growth outlook is expected as economic
rebalancing progresses. Risks to growth now more evenly balanced.
• Export-led economic growth forecast to continue over 2016 and 2017 while
growth in domestic demand expected to remain subdued.
• The current pace of expansion in the non-mining economy is encouraging but
likely to remain sluggish during the early part of the forecast horizon.
• A softer commodity market outlook, high under-employment, and constrained
spending capacity by consumers and businesses expected to weigh on the
short-term growth outlook.
2015-16e 2016-17f 2017-18f 2018-19f
Telstra 6.1% 5.9% 5.7% 5.6%
Market 5.8%-6.4% 5.6%-6.1% - -
Unemployment rate: Surprising resilience in employment growth over 2015
masks excess capacity reflected in high full-time un/N. If the 2016 growth
outlook unfolds as expected, the un/N rate is likely to peak at a lower level.
2015-16e 2016-17f 2017-18f 2018-19f
Telstra 2.2% 2.5% 2.6% 2.6%
Market 1.8%-2.8% 2.3%-2.7% - -
CPI Inflation: With labour market slack expected to persist over the coming
year given soft demand conditions, CPI inflation should remain subdued due to
absence of ‘demand-pull’ price pressures. But upward risks posed by lower A$.
MYEFO=Mid-Year Economic &
Fiscal Outlook (Dec. 2015)
2.6%
2.9%
3.1%
2.9%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2012-13 2013-14 2014-15 2015-16(e) 2016-17(f) 2017-18(f) 2018-19(f)
Real GDP Growth
(FinancialYear Average)
Telstra forecasts (as at Dec. 2015) FederalBudget (MYEFO)2015
Long-term trend post-1990 Currentmarket consensus
2.2%
2.5% 2.6% 2.6%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2012-13 2013-14 2014-15 2015-16(e) 2016-17(f) 2017-18(f) 2018-19(f)
Consumer Price Index Outlook
(FinancialYear Average)
Telstra forecasts (as at Dec. 2015) FederalBudget (MYEFO)2015*
Long-term trend (1990-current) Currentmarket consensus
* Budget forecast through-
the-year to Junequarter.
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3MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
KEY CHANGES IN GDP & CPI FORECASTS
The major revisions to the growth outlook effected in this forecast update (relative to previous) are to:
1. Decrease business capex in line with the sharp downturn in the mining sector as growth in the Chinese economy moderates sustaining sharply lower
commodity prices;
2. Frontload some public spending including by states; and
3. Modestly lower near-term export growth forecasts even though the ramp-up in mining production and output will sustain elevated levels of resource exports.
Consumer spending forecasts largely unchanged. The outlook for consumer spending is influenced by the evolution of fiscal and monetary policy; a more resilient
performing labour market than previously expected; improved household balance sheets given focus on debt consolidation and higher asset prices; and moderating
support from housing construction (as activity slows). Weak wage growth, high savings & subdued confidence key factors weighing on the spending outlook in 2016.
With respect to the outlook for inflation, the downgrade to the 2015-16 (and to a lesser extent 2016-17) outlook largely reflects:
1. Expectations that the economy will continue to operate with a non-trivial degree of spare capacity keeping growth in labour costs low; and
2. Sustained low demand-pull price pressures in the short-term given the patchwork nature of domestic growth. But structural cost pressures in health, education
and utilities likely to keep cost-push inflation 'sticky‘ which, combined with a lower US$/A$, will bias overall inflation risks upwards.
While domestic demand conditions are expected to gradually improve and strengthen in 2016 and 2017, it is likely that overall inflationary pressures will see the
headline rate oscillate around the middle of the RBA target range (2%-3%) over the medium-term.
-0.1%
0.1%
-0.3%
-0.1%
0.0%
0.1%
-0.2%
0.2%
0.0%
0.1%
0.0%
0.1%
-0.4%
-0.3%
-0.2%
-0.1%
0.0%
0.1%
0.2%
RealGDP ConsumerSpending CPI Inflation UnemploymentRate
Points
Dec. 2015 Forecasts: Key Revisions Since June 2015
(Yearaverage% pointchange)
% point chg in 2015-16 expectation
% point chg in 2016-17 forecast
% point chg in 2017-18 forecast
2015-16& 2016-17EconomicOutlook
1. The short-term growth outlook effectivelyunchanged reflectingdragon growth from lowerbusiness capexandlackof durable
offset by otherparts of the economy such as householdspendingand non-miningbusinesscapex. Exports a keygrowth driver.
2. The unemployment rate now expectedto peakat slightlylower level (~6.1% in 2016) but remain closeto this level for longerthan
previously thought. A key downsideriskto growth in wages, household disposableincome and consumption.
3. Subdued domestic demandconditions sustaininglow inflation in theshort-term. Supports RBA 'low for longer' rate scenario.
Short-term inflation forecasts downgraded
given extent of global disinflation risk;
low commodity prices; weak wage
growth; and subdued domestic demand.
Forecast revisions 2015-16(e) 2016-17(f) 2017-18(f) 2018-19(f)
Real GDP June 2015 2.7% 2.9% 3.1% 3.0%
December 2015 2.6% 2.9% 3.1% 2.9%
% pt change -0.1% 0.0% 0.0% -0.1%
Consumer June 2015 2.7% 2.9% 3.0% 3.0%
Spending December 2015 2.8% 3.0% 3.1% 2.9%
% pt change 0.1% 0.1% 0.1% -0.1%
Business June 2015 -7.1% -2.3% 3.8% 4.7%
Capex December 2015 -8.9% -2.5% 2.1% 5.2%
% pt change -1.8% -0.2% -1.7% 0.5%
Exports June 2015 7.7% 7.2% 6.8% 5.2%
December 2015 6.4% 7.3% 5.6% 4.3%
% pt change -1.3% 0.1% -1.2% -0.9%
Employment June 2015 1.5% 1.9% 1.7% 1.6%
December 2015 1.9% 1.8% 1.8% 1.7%
% pt change 0.4% -0.1% 0.1% 0.1%
Unemployment June 2015 6.2% 5.7% 5.6% 5.6%
Rate (period end) December 2015 6.1% 5.9% 5.7% 5.6%
% pt change -0.1% 0.2% 0.1% 0.0%
CPI (FY average) June 2015 2.5% 2.7% 2.6% 2.6%
December 2015 2.2% 2.5% 2.6% 2.6%
% pt change -0.3% -0.2% 0.0% 0.0%
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4MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
KEY CHANGES IN OTHER ECONOMIC VARIABLES
Reflecting labour market slack, rising demand for labour is likely to be met by increased
hours worked suggesting that the translation of output and employment growth into wage
inflation is likely to remain muted; at least in the short-term. Consequently wage growth is
likely to persist around decade lows in 2016-17.
Factors limiting consumer demand in the short-term include the likely gradual pick-up in
employment as labour demand is initially met by increased hours worked (i.e. converting
part-time employees to full-time where appropriate) which in turn is constraining wage
growth and spending capacity; the savings ratio likely to sustain above pre-GFC levels
reflecting ongoing cautious household behaviour and balance sheet repair; and only soft
household debt uptake (especially relative to pre-GFC and despite low interest rates).
Latest macro
forecasts for 2016-17
broadly in line with
market consensus
6.1%
5.9% 5.7% 5.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
2012-13 2013-14 2014-15 2015-16(e) 2016-17(f) 2017-18(f) 2018-19(f)
Employment Growth & Unemployment Rate
(FinancialYear Average)
Unemploymentrate
Employmentgrowth
Long-term trend in N growth
3.0% 2.8%
-2.5%
1.9%
7.3%
3.3%
2.9% 2.5%
Consumer
Spending
Housing
Investment
Business
Capex
Domestic
Demand
Exports Imports Real GDP CPI Inflation
Latest Economic Forecasts: Key Components of
GDP & CPI Inflation in 2016-17
(FYAverage % Change; Market forecasts as at Dec. 2015)
Low market forecast Averageforecast (Consensus)
High market forecast Telstra forecast
0%
1%
2%
3%
4%
5%
6%
7%
8%
2011-12 2012-13 2013-14 2014-15 2015-16(e) 2016-17(f) 2017-18(f)
Consumer Spending, Household Income
& Unemployment Rate
RealConsumer Spending
NominalHousehold DisposableIncome
UnemploymentRate
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5MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
GLOBAL ECONOMIC TRENDS & OUTLOOK
Global growth conditions continue to be challenging and projected to remain modest relative to pre-GFC trends. The recent moderate pace of growth
in the global economy is likely to continue in 2016. Differential prospects for moderate growth persist across advanced and developing economies. The
short-term growth outlook is also weighed down by intensifying geo-political risks in the Middle East, and socio-economic risks such as the European
refugee crisis and elevated terrorism threat.
Sharply lower global oil prices, the downturn in key commodity markets sustaining low commodity prices, and factory-gate deflation in China are
conspiring with subdued demand conditions in keeping global inflation restrained. Cyclically benign and below-target inflation among major advanced
economies as well as China underscores expectation that monetary policy will remain accommodative for a considerable time even as growth recovers.
The weaker outlook for emerging market growth especially in Asia has resulted in the International Monetary Fund (IMF) lowering its macro forecasts
for global growth. As per its latest October 2015 update, the IMF expects global GDP to expand by 3.1% in 2015 (down from a July forecast of 3.3%)
before accelerating to around 3.6% in 2016 (down from a July forecast of 3.8%). Importantly the IMF now views as ‘more pronounced’ the downside risks
to the global growth outlook compared to its assessment in July. Further, it believes that the return to robust and synchronised growth ‘remains elusive’.
The IMF expects the US economy to post growth of 2.6% in 2015 and 2.8% in 2016 (up 0.1% point and down 0.2% points on the July forecast,
respectively) supported by low energy prices, an improved housing market, labour market strength and less fiscal drag.
With Asian growth cooling in 2015, growth is expected to exhibit a modest rebound in 2016 and 2017 driven by gains in domestic and external demand
(esp. as US growth improves). Growth in developing Asia and the ASEAN-5 should accelerate to around 4.5% and 4.9%, respectively in 2016.
Against the backdrop of ‘low-flation’ and downside risks to global economic growth, a non-synchronised outlook for global monetary policy remains
firmly in place (i.e., US monetary policy being gradually and cautiously normalised over coming years while asset buying programs (or quantitative easing
(QE)) to be maintained in Japan and the Euro zone in 2016).
Divergent monetary policy in the US and other major economies likely to underscore a high degree of volatility in financial markets over the short-
term forecast horizon. In turn, this will impact emerging market economies via uncertainty and volatility in international capital flows. In addition, emerging
market currency depreciation and FX volatility (as the US$ strengthens) poses upside risk to inflation and compromises growth in these economies.
Source: International Monetary Fund (IMF); charts produced by Economics@Telstra.
3.4 3.1
3.6 3.8
2014 2015e 2016f 2017f
Global Economy
1.8 2.0 2.2 2.2
2014 2015e 2016f 2017f
Advanced Economies
4.6
4.0 4.5 4.9
2014 2015e 2016f 2017f
Emerging Market
Economies
Annual GDP
Growth Rates
The IMF expects robust &
synchronised growth b/w
advanced & emerging
market economies to
‘remain elusive’.
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6MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
GLOBAL ECONOMIC TRENDS & OUTLOOK (cont.)
China growth outlook unchanged
but IMF remains concerned about
downside risks as leverage-fuelled
asset market excesses unwind.
US growth forecasts favourable
tempered by exposure to softer
Asian growth outlook.
Global growth outlook weighed
down by weaker emerging market
growth. A robust and synchronised
growth recovery remains ‘elusive’.
ASEAN-5 growth outlook resilient
impacted by weaker terms-of-trade.
Real GDP Growth 2014 2015f 2016f
World Output 3.4% 3.1% 3.6%
Change from previous forecasts (July 2015) - 0.2% - 0.2%
Advanced Economies 1.8% 2.0% 2.2%
Change from previous forecasts (July 2015) - 0.1% - 0.2%
United States 2.4% 2.6% 2.8%
Euro Area 0.9% 1.5% 1.6%
Japan -0.1% 0.6% 1.0%
United Kingdom 3.0% 2.5% 2.2%
Australia 2.7% 2.4% 2.9%
Change from previous forecasts (July 2015) - 0.4% - 0.2%
Emerging & Developing Economies 4.6% 4.0% 4.5%
Change from previous forecasts (July 2015) - 0.2% - 0.2%
Emerging & Developing Asia 6.8% 6.5% 6.4%
China 7.3% 6.8% 6.3%
Change from previous forecasts (July 2015) 0.0% 0.0%
India 7.3% 7.3% 7.5%
ASEAN-5 4.6% 4.6% 4.9%
IMF, World Economic Outlook (October 2015 Update)
• The global growth outlook has deteriorated compared to the last forecast update in mid-2015 with risks
skewed to the downside.
• Among advanced economies, the IMF expects growth to strengthen in the US over 2016 consistent with
recent partial economic indicators while the growth recovery in the Euro zone and Japan more cautious.
• China’s growth trajectory is forecast to continue to slow as economic rebalancing proceeds.
• Growth in Australia to improve and remain below-trend in 2016, consistent with internal and consensus view.
Source: International Monetary Fund (IMF); table produced by Economics@Telstra.
Note: A forecast update by the IMF is due in
late January 2016. Modest revisions are
expected but the main themes remain in place.
7. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
7MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
CURRENT STATE OF PLAY: AUSTRALIAN TRENDS
Headline GDP growth masks weakness in the domestic
economy. Supports the RBA’s conditional easing bias.
Source: Australian Bureau of Statistics; Economics@Telstra.
Following a multi-year mining investment boom which has now ended,
the Australian economy continues to go through a difficult transition
period as it seeks to rebalance growth drivers.
Against the backdrop of low interest rates and a lower A$, domestic
data flow over 2015 indicates that the necessary rebalancing of the
economy post-mining boom is occurring only gradually.
As a result, GDP growth is likely to remain below-trend in 2016 until the
shock of a substantial decline in mining investment and global
commodity prices is fully absorbed, which is unlikely for a few years.
Sub-par economic growth in Australia observed in H1 2015 continued in
the September quarter (latest data available). Headline GDP increased
by 0.9% in the three months to September on the back of strong net
exports, pushing the annual rate of growth higher to a still sluggish 2.5%
(up from 1.9% at end-June).
The latest GDP data have highlighted the difficulty in transitioning away
from mining-led growth to broader-based growth, with the economy’s
growth momentum unbalanced and lacking depth. Only net exports
provided a solid contribution to September quarter growth with domestic
demand remaining subdued.
Labour market trends have been broadly favourable over the past year
despite the economy growing at a below-trend pace over this period.
While slack in the labour market persists evidenced by low wage growth
and constraints on full-time employment growth, the unemployment rate
has remained broadly flat.
Risks to short-term growth skewed to the downside with the outlook for
non-mining business capex and employment undermined by lingering
uncertainty over the economic outlook overlayed by political ‘noise’.
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Sep-1999 Sep-2001 Sep-2003 Sep-2005 Sep-2007 Sep-2009 Sep-2011 Sep-2013 Sep-2015
Australia's Growth Momentum Sub-Trend
Exports Key Growth Driver w/ Domestic Demand Subdued
Net exports (% pt cont. to qtrly GDP)
GDP (annual % chg)
Domestic demand (annual % chg)
(All data are real, seasonally adjusted)
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Real GDP, Domestic Demand,
CPI Inflation & RBA Cash Rate
Annual growth in Real GDP
RBA Cash Rate
Headline CPI inflation
Annual growth in domestic demand
GDP growth improved in Q3
2015 while domestic demand
weakened. Below-trend growth &
soft demand vindicates RBA
commitment to ongoing stimulus.
8. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
8MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
RECENT TRENDS IN CONSUMER SPENDING
Source: Australian Bureau of Statistics; Economics@Telstra.
Moderation in HDI growth due to low wage inflation. Weak wage growth creating new
jobs (though full-time unemployment remains high) & sustaining current employment
levels.
Growth in consumer spending remains on a tentative upswing after being
sluggish in recent years. Drawdown in savings partly financing spending.
Consumer spending is resilient, but growing at a
lacklustre pace. Subdued consumer confidence,
slow wage growth & concerns about the outlook
key factors weighing on spending propensity.
The resilience of aggregate consumer spending (in real terms)
continues to underscore GDP growth with the quarterly pace of
spending observed in September (+0.7% q/q & 2.7% y/y) slightly above
the average rate observed over 2014 and H1 2015.
Decent employment growth, a positive housing wealth effect and a
modest downward trend in the household saving ratio over the past year
(with the latter now 9.0% cf. a 2014 average of 9.5%) have played a key
role in supporting household expenditure.
Growth in household disposable income (HDI) continues to be resilient
despite soft nominal wage growth over 2015. In the September quarter,
HDI increased by 0.5% (with growth over 2015 at 2.8% cf. 3.6% over
2014). On an annual basis, HDI growth stabilised at around 4% - down
on its recent 10-year average (6.3%).
In an outcome consistent with the moderate pace of growth in consumer
spending, retail sales increased 0.4% in November 2015 (up 4.3%
across the year; the latest data available).
According to the ABS, the latest national retail sales data suggest that
aggressive price discounting continues to buoy retail activity with
consumers having limited capacity to lift spending further.
The outlook for consumer spending is influenced by the evolution of
fiscal and monetary policy with the latter expected to remain stimulatory
in 2016 and 2017; a resilient labour market aided by low wage growth;
improved household balance sheets mainly driven by high asset prices
(esp. housing); and further gains in housing activity.
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Sep-2005 Sep-2007 Sep-2009 Sep-2011 Sep-2013 Sep-2015
Consumer Spending, Household Income and Savings
(Annual % Change)
Savings (% HDI) RealConsumer Spending Household DisposableIncome
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
Sep-2001 Sep-2003 Sep-2005 Sep-2007 Sep-2009 Sep-2011 Sep-2013 Sep-2015
Household Disposable Income & Employment
(Annual Growth)
Wagegrowth
Employmentgrowth
HDI
9. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
9MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
WESTPAC-MI CONSUMER CONFIDENCE
Source: Australian Bureau of Statistics; Westpac-Melbourne Institute; Economics@Telstra.
The RBA can only do so much to support confidence. “Animal spirits” need to lift.
Confidence among consumers effectively at a neutral level. While recently improved,
sentiment continues to be weighed down by high un/N rate and weak wage growth.
Volume growth in retail & total spending holding up well buoyed by low price
inflation. But confidence levels remain broadly subdued weighing on demand.
The latest Westpac-Melbourne Institute research has shown that
consumer sentiment levels in December consolidated most of the
previous month’s gain.
Possible structural changes to the GST, concern over heightened job
insecurity, moderating trends in housing, and limited spending capacity
given weak wage growth, are key issues weighing on confidence.
The index of consumer confidence in December fell marginally from
101.7 to 100.8 (down 0.8% m/m but up 10.6% y/y), and remains broadly
neutral (an index reading below 100 means pessimists outnumber
optimists).
The weight of negative factors impacting consumer confidence remains
a non-trivial threat to the outlook for consumer spending in 2016 likely
sustaining below-trend growth therein.
The unemployment rate remains a key factor impacting consumer confidence.
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.560
65
70
75
80
85
90
95
100
105
110
115
120
125
Dec-88 Dec-91 Dec-94 Dec-97 Dec-00 Dec-03 Dec-06 Dec-09 Dec-12 Dec-15
Per CentIndex Number
Consumer Confidence & Unemployment Rate
Consumer Confidence(Index)(LHS)
UnemploymentRate(Inverted)(RHS)
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 Dec-15
Consumer Confidence & Monetary Policy
(Annual % Change)
Westpac-MIConsumerConfidence(LHS)
RBACash Rate-Inverted (RHS)
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 Dec-15
80
90
100
110
120
130
Index Number
Consumer Confidence & Household Spending
(Quarterly data;Annual Growth Rates)
Consumer Confidence (Index) (6-month lead) (RHS) Real Consumer Spending(LHS)
Real Domestic Demand Real (Volume) Retail Sales
10. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
10MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
RECENT TRENDS IN BUSINESS INVESTMENT
Source: Australian Bureau of Statistics; Economics@Telstra.
Non-mining capex esp. in services has weakened with the outlook to remain subdued.
Current trends in business capex highlight the significant decline in mining and
mining-related capex in line with prior outcomes.
The changeover in the economy from mining-led to broad-based growth
continues to play out slowly. Capex growth now at lowest since early 1990’s recession.
The latest ABS business capex data for the September quarter confirms
that relative to its 2012-13 peak, mining investment is approximately
50% through its multi-year decline. In an outcome well below market
forecasts, aggregate business capex decreased by 9.2% q/q, to be down
20.0% y/y (a ‘recessionary’ level).
The quarterly contraction in business capex (in real or volume terms)
highlights the fact that the economy continues to go through a difficult
transition period.
After a multi-year mining capex boom, the rotation of growth drivers
away from mining (down 10.4% q/q and 29.6% y/y) towards higher levels
of investment in the services sector (down 10.0% q/q and 10.5% y/y)
remains elusive.
While partly boosted by stronger activity in the housing market and the
property-related services sector, a challenging environment for non-
mining capex persists despite the RBA’s accommodative monetary
policy settings and the lower key US$/A$ cross rate.
The tepid outlook for business capex was confirmed by the ABS’ fourth
estimate for business capex in 2015-16 which was 20.9% lower than the
comparable fourth estimate for 2014-15. But estimate 4 is 4.0% higher
than estimate 3 for 2015-16.
As the economy moves away from capital-intensive mining and
manufacturing sectors towards more labour-intensive, services-based
sectors which tend to have lower average levels of investment, it is
expected that growth in aggregate business capex will be slower than in
previous episodic RBA easing cycles. This will sustain below-trend GDP
growth in 2016.
Business capex is weak and will remain a drag on
economic growth in 2016 and 2017.
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Sep-89 Sep-91 Sep-93 Sep-95 Sep-97 Sep-99 Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Real Business Capital Expenditure
Quarterly Growth
AnnualGrowth
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15
Real Business Capex by Industry: Post-GFC
(Annual % Change)
Totalindustry Mining
Manufacturing Other industries
11. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
11MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
NAB BUSINESS CONFIDENCE & CONDITIONS
Source: Australian Bureau of Statistics; NAB; Economics@Telstra.
Business confidence & conditions both above their respective 10-year averages. Further gains in business confidence from stimulatory monetary policy limited.
Recent NAB business survey highlights resilience in non-mining business
conditions which continues to gain traction from accommodative RBA policy.
But the improvement in business conditions & growth in domestic demand non-
synchronised. Highlights dominant impact of mining downturn via capex decline.
Despite lower commodity prices and a loss of domestic growth
momentum in Q3 2015, the latest NAB monthly business survey for
November revealed resilience in both business confidence and business
conditions.
In November, the index of business confidence remained favourable and
above its recent 10-year average (+3.4) rising from an index reading of
+3 points to +5 points. At the same time, the index of business
conditions has consolidated well above its recent 10-year average level
(+4) stabilising at +10 index points.
While underlying growth momentum in the domestic economy remains
weak as evidenced by the latest GDP data, the services sector
continues to report favourable business conditions.
The survey also highlights the growing gap between deteriorating mining
and manufacturing sectors, and expanding services sector activity.
-20
-15
-10
-5
0
5
10
15
20
25
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13 Sep-15
Index Number
Domestic Demand Growth & NAB Business Conditions
(Quarterly Data)
AnnualGrowth in DomesticDemand(Real)(LHS)
NAB BusinessConditions(Net Balance, 1 qtr lead)(RHS)
AnnualGrowth
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
Nov-03 Mar-05 Jul-06 Nov-07 Mar-09 Jul-10 Nov-11 Mar-13 Jul-14 Nov-15
Index Number
NAB Business Confidence & Business Conditions
(Monthly Data)
Businessconfidenceindex
Businessconditionsindex
-100
-75
-50
-25
0
25
50
75
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
Nov-01 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13 Nov-15
BasisPointsIndex Number
Business Confidence & Change in RBA Cash Rate
Monthlybasispointchangein
RBACash Rate(RHS)
NAB BusinessConfidence
(Index)(LHS)
12. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
12MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
OUTLOOK FOR AUSTRALIAN GDP GROWTH
Thematically, the main macro trends remain unchanged with output (ex.
mining), demand, employment and wages expected to continue to grow
at a soft pace in 2016 assisting in containing inflation.
The cyclical downturn in the global commodity market and sharp drop-off
in mining capex expected to be largely offset by higher mining production
and export volumes.
Export-led economic growth is thus forecast to continue over most of the
forecast horizon while growth in domestic demand could remain subdued.
The export phase of the mining boom is less labour intensive compared
to the recent multi-year investment phase so should boost labour
productivity but do little to lift economy-wide income growth.
Under the auspices of low interest rates and a lower US$/A$, the
transition away from mining-led growth to broad-based growth such as
consumer spending and housing is proceeding, albeit slower than
desired.
Accordingly, the outlook for short-term growth is somewhat pessimistic as
the economy struggles back towards its trend rate (which is arguably
structurally lower). Indeed, with population growth slowing in recent years
due to lower levels of net migration, this will weigh on economic growth
going forward.
Where previously the potential trend growth rate was estimated at around
3.25%, many analysts (inc. the RBA and Treasury) now consider the
potential growth rate being closer to 2.75%-3.0% (see top chart).
Risks to short-term growth remain skewed to the downside with the
outlook for non-mining business capex and employment undermined by
lingering uncertainty over the economic outlook. RBA monetary policy is
likely to remain accommodative and on hold through this year.
Growth forecast to improve by end-2016 though
significant headwinds and risks persist.
2.6%
2.9%
3.1%
2.9%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2012-13 2013-14 2014-15 2015-16(e) 2016-17(f) 2017-18(f) 2018-19(f)
Australian GDP & CPI Inflation Outlook
(Year average % change)
RealGDP CPIInflation Long-term GDPgrowth rate
New lower
trend rate??
2.6%
2.9%
3.1%
2.9%
-2%
-1%
0%
1%
2%
3%
4%
2013-14 2014-15 2015-16(e) 2016-17(f) 2017-18(f) 2018-19(f)
Points
Contributions to Annual GDP Growth
Net exports Housing
Consumerspending Businesscapex
GDP
Consumer spending, housing& net exports key growth drivers over
the early/middle forecast period offsettingdragfrom weaker mining
capex (and to a lesser extent, fiscal consolidation).
13. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
13MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
CPI PRICE INFLATION: Q3 2015
The modest rise in headline inflation in the September quarter 2015 (up
0.5% q/q and 1.5% y/y) was below market and internal forecasts.
The economy’s soft growth pulse, sluggish domestic demand and weak
wage growth given labour market slack are holding down demand-pull
inflationary pressures. The current era of ‘low-flation’ and a sustained
negative output gap are key factors weighing on the outlook for nominal
and real GDP growth.
The underlying rate of inflation (i.e., ex-energy and food prices), and a
key focus of policymakers, rose by 0.3% in the September quarter,
resulting in the annual rate stepping down from 2.3% to 2.2%. Trends in
underlying inflation are critical for monetary policy deliberations as they
provide a better gauge of fundamental price pressures in the economy.
In terms of annual price increases, elevated price pressures evident
across key areas including household contents and services (+1.8% cf.
post-GFC avg. of +0.9%) and recreation (+1.1% cf. post-GFC avg. of
+0.4%). Structural price pressures remain in health and education.
Source: Australian Bureau of Statistics; RBA; Economics@Telstra.
Cyclically benign inflation in Australia underscoring a
‘lower for longer’ interest rate scenario to support the
2016 and 2017 growth outlook.
-1%
0%
1%
2%
3%
4%
5%
6%
Sep-2005 Sep-2007 Sep-2009 Sep-2011 Sep-2013 Sep-2015
Consumer Price Index: Headline & RBA Core Inflation
Annualheadline% change
Quarterly headline% change
Annual'core'or 'underlying'rate is
averageof RBA'sweighted median &
trimmed mean measures
RBA TargetRange:2%-3%
annualrate(on average)
acrossthe economiccycle
* Average of weighted median & trimmed mean measures.
Consumer Price Index: Q3 2015 3-year
Component (weight in CPI basket) Q2 2015 Q3 2015 Q2 2015 Q3 2015 CAGR
Food (16.8%) -0.2% 0.1% 1.3% 0.2% 1.0%
Alcohol & Tobacco (7.1%) 1.2% 1.3% 4.8% 5.0% 5.4%
Clothing & Footwear (4.0%) 1.3% -1.1% -0.9% -1.0% -1.0%
Housing (22.3%) 0.7% 0.6% 2.5% 2.7% 3.0%
Household contents (9.1%) 1.0% 0.8% 1.4% 1.8% 0.7%
Health (5.3%) 2.7% 0.3% 4.3% 4.8% 4.5%
Transport (11.6%) 3.4% 0.1% -2.4% -2.2% 0.2%
Communication (3.1%) -0.6% -2.0% -3.4% -4.1% -1.4%
Recreation (12.5%) -1.4% 0.8% 0.9% 1.1% 1.3%
Education (3.2%) 0.0% 0.2% 5.4% 5.5% 5.5%
Finance (5.1%) 0.3% 0.5% 2.1% 2.0% 2.0%
Headline CPI 0.7% 0.5% 1.5% 1.5% 2.0%
RBA Underlying CPI* 0.6% 0.3% 2.3% 2.2% -
Quarterly % Annual %
-3%
-2%
-1%
0%
1%
2%
3%
Sep-2003 Sep-2005 Sep-2007 Sep-2009 Sep-2011 Sep-2013 Sep-2015
Australian Economy: Estimated Output Gap* & CPI
(*Output Gap = Actual GDP Growth less Potential (Trend) GDP Growth)
OutputGap (% points)
CPIA% (Deviation from post-1990 average)
Negative output gap
tames inflation
Actual output is less than
full-capacity output
Underlying CPI
steady in lower-half
of RBA target zone
14. TELSTRATEMPLATE4X3BLUEBETA|TELPPTV4
14MACROECONOMIC FORECASTS| MARK KOOYMANS | JAN. 2016 |
OUTLOOK FOR INFLATION & MONETARY POLICY
Source: RBA; Table produced by Economics@Telstra.
While the short-term growth outlook has improved, the RBA
is likely to maintain a conditional easing bias in 2016.
Inflationary pressures in the short-run are likely to remain subdued given little sign that demand is improving and moving onto a sustainable basis. Even
under a modest export-driven GDP growth scenario in 2016 and 2017 broader excess capacity is likely to persist given the patchwork nature of the
economy. Consequently the Australian economy is starting this moderate growth recovery/upswing with more spare capacity than in previous upswings.
This would limit upward pressure on the cost of labour, equipment and materials supporting the non-problematic inflation outlook.
The monetary policy transmission mechanism in the current easing cycle continues to only slowly impact broader activity (ex. housing) given the difficulty
in transitioning away from mining-led growth to broader-based growth. The downturn in mining capex is becoming more entrenched with limited offset
from other parts of the economy. This is sustaining a pace of growth that remains unbalanced and lacking depth.
In the second half of 2015, the RBA maintained a neutral/marginally dovish policy bias against the backdrop of sluggish domestic growth and cyclically
benign inflation, a posture retained at its latest December meeting. While the RBA has not signalled an end to the rate cut cycle (the last 25bps rate cut
was effected in May 2015), the likelihood that it will act on its conditional easing bias remains 50/50 according to some market analysts.
Arguably, the RBA is unlikely to act on this bias unless the labour market deteriorates significantly. The commencement of policy normalisation in the US
in December 2015 (albeit subject to a very cautious and gradual pace) will limit the need for additional monetary stimulus in Australia given the downward
pressure likely to be exerted on the US$/A$ - a lower exchange rate acts as a de facto interest rate cut. Accordingly, the current stance of monetary policy
is likely to be maintained over the coming year. It should be noted that the extent of policy normalisation that does eventuate in the US will be from a
lower end-rate (0.0% to 0.25%) and be more gradual than likely effected in Australia. As such, the interest rate differential support for the A$ will only
erode very gradually. Below are latest RBA forecasts for growth and inflation as per its latest Statement on Monetary Policy (SMP).
Actuals and forecasts are in y/y% change terms. RBA November 2015 SMP. Downgraded RBA forecasts in red.
Previous forecasts (where revised) in brackets. TLS forecasts presented elsewhere in the pack are FY averages.
GDP & CPI FORECASTS Latest Forecasts for year-ended ...
RBA November 2015 SMP (actual) Dec. 2015 June 2016 Dec. 2016 June 2017 Dec. 2017
Real GDP (Q3, 2015) 2.5% 2.25%(2.5%) 2%-3% 2.5%-3.5% 2.75%-3.75%(3%-4%) 3.0%-4.0%(3%-4.5%)
CPI inflation (Q3, 2015) 1.5% 1.75%(2.5%) 1.5%-2.5%(2.0%-3.0%) 2.0%-3.0% 2.0%-3.0% 2.0%-3.0%
Underlying CPI (Q3, 2015) 2.2% 2.0%(2.5%) 1.5%-2.5%(2.0%-3.0%) 2.0%-3.0% 2.0%-3.0% 2.0%-3.0%
Telstra (December 2015) (TLS forecasts in y/y%terms)
Real GDP 2.5% 2.4% 2.7% 3.1% 3.2% 3.4%
CPI inflation 1.5% 1.8% 2.2% 2.6% 2.6% 2.7%