Last Thursday, Paul Bloxham, HSBC Chief Economist for Australia and NZ, gave an excellent briefing on the economic outlook at a lunchtime event organised by the French Australian Chamber of Commerce and Industry (FACCI), and hosted by Clayton Utz at their Brisbane CBD offices. Bloxham is highly optimistic about Australia’s (and Queensland’s) growth prospects due largely to:
- our close ties to China and other Asian economies, which will continue to grow and buy our resources and send us ever-increasing numbers of tourists (see chart below), and
- the rebound in commodity prices, turning what was a headwind in recent years into a tailwind, encouraging the re-activation of mines and an expansion of output and employment in the resources sector, with positive flow-on impacts to the rest of the economy—and a large increase in State Government royalties revenue and Commonwealth company tax revenue which could avert a loss of Australia’s AAA credit rating.
As you would expect, Bloxham qualified his observations by noting the huge amount of uncertainly arising from the US and possibly from elections in Europe later this year. Bloxham speculated on what Trump’s policies might mean for Australia, noting there could be one benefit from a US-China trade war, as we could then export more agricultural products to China. I would note that, of course, we may also suffer if the US buys fewer products from China and then this flows through to their demand for our resources. Also, Bloxham suggests, a higher US dollar caused by Trump’s policies and more restrictive immigration rules in the US might send foreign students who might otherwise go the US to Australia instead.
If you are interested in the economic implications of Trump, as Secretary of the Economic Society of Australia (Qld), I would encourage you to attend our upcoming event at the Ship Inn, South Bank on Wednesday evening 22 February: