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:
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.