Oliver's Insights - The Australian economy bounces back again - five reasons why some further pick up is likely and implications for investors
The Australian economy bounces back again - five reasons why some further pick up is likely and implications for investors
Article by Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital
The following note takes a look at the rebound in the Australian economy seen in the June quarter and the outlook.
The key points are as follows:
Australian growth bounced back in the June quarter helped by consumer spending, investment and trade.
There is good reason to expect growth to pick up further going forward: the drag from mining investment is fading, non-mining investment is looking better, public investment is strong, trade is adding to growth and profits are rising again. But growth is likely to be constrained around 2.5-3% and underlying inflation is likely to remain low.
Expect the RBA's cash rate to remain low for a while yet and Australian shares to move higher by year end, but to continue underperforming global shares.
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