In Brisbane today, HSBC’s Chief Economist (Australia & NZ) Paul Bloxham gave a terrific presentation on the economic outlook to the Queensland branch of the Economic Society of Australia, of which I am the Secretary. You can download his slides, which HSBC has graciously allowed ESA Qld to share, at this link:
Australia’s next growth driver: The role of the services sectors
Be sure to check out slides 10 and 11, which were popular with presentation guests, showing that “Despite slowing down, China is still contributing a lot to global GDP” and that “China is still contributing the most to global GDP growth”. Paul appeared unconcerned about the risks of a China crash and the adverse flow-on impacts that would bring, and he is very optimistic about the US and Australian economies. He noted that low interest rates and the exchange rate are helping the Australian economy rebalance at the end of the mining boom, by boosting residential construction, international tourism and education activity, and consumption spending by Australian households.
Paul noted there is scope for a further interest rate cut in Australia, which may occur if the economy does not appear to be rebalancing as readily as the RBA would like. On US monetary policy, he noted that it is very likely the federal funds rate will be lifted from its near zero rate in December, beginning a long drawn out process in which the Fed will gradually seek to withdraw its monetary stimulus.
Bloxo has a solid track record of being wrong
“Rebalancing” with debt fueled property speculation and low income Tourism?
Explain how many tourism jobs my mates who were earning $150K in the coal mines will have to take to replace their incomes?
Brisbane already has over a decade of apartment supply approved and in the pipeline – good luck with settlement – the banks are going to have to swallow hard.
Education? QUT isn’t exactly ranking high and UQ takes anyone they can get to cut a cheque – it is embarrassing for us who though these institutions meant something.
Australia needs deep reform. Not more of Bloxos “everything is awesome” nonsense.
I would listen to Pauls analysis on things ahead of many of the other dribblers in the world of economics and there is an endless stream of them. Sometimes people find it difficult to accept the data as it is, and where it is trending, rather than where they want it to be. We all sometimes wonder at the never ending supply of units etc coming on the market but if that is where the money is going then we have to accept it.