Australia's economic prospects

As the global financial crisis in the major economies, but Australia success out of recession, the more become the developed countries raised interest rates in October-since 2009 has been to raise interest rates six times. Australia's economy can withstand the impact of financial tsunami, in addition to government economic revitalization plan work and overseas to help drive the export demand, but also reflects the labor market is robust factors, the local demand for rapid economic rose in a strong and powerful support role.

However, the central bank raised interest rates on Australia has put the economy signs appear cooling. Economic growth in the first quarter of this year has been slow, consumer spending and business investment reduce, bank lending rate also slowed sharply. As the past six times the influence of interest rates gradually emerge, expected in the second half of 2010, the central bank will be more prudent, step on the gradual benchmark interest rate in the end of 2010 or early 2011 rise to the level of about 5%.

The second half of 2010, although Australia economic tone will maintain a healthy, also continues to benefit in China and Asia demand for natural resources, but face threats to the global economic recovery of the European sovereign debt crisis, plus China the risk of slowing economic growth, is expected to Australia economic growth may be less strength the expected mild, in 2010 will be 3% or so, to speed up slightly next year to about 3.5% level.

This author:

LiaoQiYing Karine Liu

Financial marketing Hong Kong trade center

00852-25326523

[email protected]

Review:

Guilin Gui Lin

Financial marketing Hong Kong trade center

00852-25326536

[email protected]

Financial marketing 13 July, 2010

Financial market research projects

Eye recorded

A recent development, Australian economy...... 3

1, resist the financial tsunami economic success............. 3

2, interest rates hikes were to cool the economy... 4

Second, inflation still see rising pressure...... 4

Three, resources industry development strong... 5

1, benefit from Asia needs... 5

2, the windfall profits tax resources for industry or negative impact on...... 6

Four, Australia's economy in 2010 in the face of uncertainty...... 6

1, and personal consumption by tightening policy effect on...... 6

2, the real estate market also faces policy risk...... 7

3, the family and the enterprise to lending is still cautious...... 8

4, China's economic growth slowed face the risk... 9

Five, the Australian central bank will slow down the pace...... 9

Six, a rising power...... lack 10

Seven, endnotes...... 11

figure

Figure 1 Australia GDP and constitute a...... 3

Figure 2 eight largest export market of the Australian export proportion of...... 5

Figure 3 Australian retail sales... 7#p#分頁標題#e#

Figure 4 overall bank lending...... 9

A recent development, Australian economy

1, economic success derivative financial tsunami

In the global economy are financial tsunami hit by the Australian is the only out of the developed countries of the recession success, exports also not due to global trade atrophy and fell significantly. In the 代寫澳洲經濟dissertationmost severe period, namely lehman brothers in the September 15, 2008 declared bankrupt and trigger global economic recession, the essence of Australia gross domestic product (GDP) in the fourth quarter of 2008 only quarterly 0.9% contraction in 2009 quarter of positive growth rapid answer (as shown in figure 1 below), before the Europe and America and other industrial nations step to recovery. In the years of growth, Australia is keep positive growth, and the other main developed countries is the performance.

Figure 1 Australia and components of GDP

Australia success avoid recession, one of the main reasons is the Australian government finance has been quite robust. Because of the financial crisis in before the outbreak of the Australian government has always had financial surplus, and make the government shall not be obliged to debt can also be quickly launched a massive economic stimulus policies. In February 2009, in view of the global financial crisis is the Australian economy into the edge of a recession, the government act fast, launched a $42 billion economic stimulus plan, including a $28.8 billion for schools, housing and road infrastructure, $12.7 billion in cash, by way of subsidies to low-income families; These two measures are to help promote economic growth.

In addition, relative to other major economies, Australia is always with higher, in the financial crisis before interest rates as high as 7.25%, so when crisis erupts, Australia's central bank to have more space will interest rates down from March 2009 at 3% level. The Australian has a seventy percent population 臵 have property, and most of all for the floating rate mortgage, the central bank interest rates can be directly increase 臵 industry of the family

Disposable income, make household consumption to maintain growth.

Australia another advantage is to grasp the opportunity of the Asian economic takeoff, make its total exports in the global economic downturn roughly maintain stable during. Due to the government's economic stimulus plan in four trillion yuan mostly is infrastructure investment and then China's rapid response strong growth, the demand of raw materials to Australia greatly improved, and favorable Australian export performance. Under China's coal and iron ore of raw materials such as demand to push, Australia excluding the export of agricultural products in April for the 12 months ended break in May, according to soar 33.5% to $16.1 billion a year, greatly support the Australian economy growth.

2, interest rates hikes were to cool the economy

However, with the central bank raised interest rates on Australia, economic signs for cooling. Interest rates make family reducing expenditures, the enterprise to increase investment also to stop. Add the eurozone debt crisis concussion global financial markets, Australian stock market affected by this and sharply. S&P/ASX 200 index than in May dropped 7.9% last month, is in October 2008 largest drop since the month, mainly by Banks and resources stocks took down; Later in June continued declines, press a month down 2.9%. Market hedge sharp increase emotions, cause weaker credit, more go against economic development.#p#分頁標題#e#

All sorts of factors makes Australia's economy in 2010 is a slow down in the first quarter, according to the quarter last year 1.1% of the four seasons since the first slow to 0.5%, household spending increases are on a quarterly basis since 0.9% of the season to slow down from 0.6% to, export performance is also repeatedly (as shown in figure 1 below).

Looking ahead to 2010, Australian economy though will continue to benefit from the Asia for iron ore, coal and energy and other raw materials demand, but China's economic growth slowed and the eurozone debt crisis or Australian resources industry brings negative effect. So although Australia is expected to economic growth will continue, but strength may be less the expected to moderate. Annual pace of economic recovery is expected to press since 2009, an increase of 1.4% to speed up to about 3% of the level, to 2011 will speed up slightly to 3.5% or so.

Second, inflation still see rising pressure

Australia's consumer price index according to years of growth since 2008 has fallen to 5% in the third quarter after, 2009 more fall to 1.3% in the third quarter, for 10 years low. This was mainly by the four factors, including financial crisis makes private enterprise staff salary growth slowing, slowing economic growth to domestic appear excess capacity, a sharp slowdown in global commodity prices, and the dollar exchange rate in a $2009 3 after the end of rebound sharply, and other factors.

However, inflation in 2009 in the fourth quarter began to rise, to the first quarter of this year by year more rose 2.9%. The future is expected to further improve the labor market conditions will drive the salary rise, or to bring inflation pressures. In addition, in a $

The eurozone debt crisis haze, sharply in May, the central bank raised interest rates of Australia and is expected to slow down the pace, will limit future rose $, and, to some extent, or pushes up the price of imports. Australian inflation expected this year will remain in the central bank's 2% to 3% target range, or she may reach the target range of the upper limit.

Three, resources industry development is strong

1, benefit from Asia needs

Although Australia's export performance by the financial crisis also have influence, but compared with most developed countries exports to double digit rate down sharply, Australia were hit is slim. One of the main reasons is Australia and Asia countries in recent years of increasingly close economic ties. In 2004, the United States is Australia the third largest exporter, but its importance has now been China, Japan, South Korea and India replaced. To 2009, the four market accounts for 57.5% of the total Australian export, and America only fall into fifth place (as shown in figure 2 shows).

Figure 2 eight largest export market of the Australian export proportion

For of Australia, China, the export market in recent years is the importance of rapid growth. China's share of the proportion of the Australian export since the 1980 s to rise gradually; Especially after the outbreak of a financial tsunami, most countries demand are considerable damage, but the Chinese government but large-scale investment in infrastructure to promote, make Chinese demand growth is more obvious. This let China accounts for the proportion of the Australian export since 2004 has soared 10.3% to 23.9% in 2009, beyond Japan as Australia's biggest export market.#p#分頁標題#e#

In addition, the product structure of Australia (product mix) is also one of its advantages. Australia has very rich mineral, such as coal and iron ore, etc, these are emerging market in rapidly developing foundation construction and industrial production period the most need of original material

Material, it makes rich resources more can grasp the Australia a Asian emerging market upward trend of rise.

2, the windfall profits tax resources for industry or brings negative effect

However, resources for the future development of the industry is in government policy or will be. The Australian government in published Tuesday, will start in 2012 to the domestic resources enterprise levy of 40% windfall Profits Tax resources (Resource Super Profits Tax), expect before two years would raise $12 billion to pay for the infrastructure, retired and enterprise Tax changes and other fees. This was the largest since world war ii tax system reform of Australia.

However, income tax will weaken the competitiveness of Australia, increase the tax burden of corporate resources and extrusion of the profits of the business, enterprise investment for the future and large expansion projects bring potential impact, in the medium term may slow down the development of the industry of resources.

Resource tax makes it appear violent political Australia concussion. Prime minister Kevin Rudd (Kevin Rudd) regardless of the Labour party belongs in the protests, insist on mine enterprises collecting the resource tax, cause resources industry is very fierce opposition voice; Plus he postponed launched a carbon emissions trading plan, lead to approval ratings down. This makes Kevin rudd labor party colleagues losing support, also was forced to in June 24, dramatic announced to step down, on the prime minister time only two and a half years, the vice prime minister Gillard (Julia Gillard) take over.

Gillard sworn immediately after taking office says it will hold open attitude, is willing with mining enterprise is negotiating tax policy. July 2,, the Australian government announced a revised mining new taxes collection plan, to the mining industry made a great concession, and of the new project from the original plan of the whole tax rate 40% down to 30%, suitable for iron ore and coal; Oil and gas resources tax rate will be 40%. The four resources accounted for three-quarters of the Australian export.

The new plan marks the Australian government in the original plan on the basis of a major compromise, also ease the government and resources industry on taxes of fierce debate and help attract ore business capital return to Australia. And because gillard and the Labour party is twisted, believe that two prime minister politics and foreign policy, not a significant change; And the current finance minister Swan (Wayne Swan) will also stay on, and become the gillard deputy prime minister, is expected to Australia in the financial policy won't have too big change, will also insist on government in 2013 to realize the goal of budget surplus.#p#分頁標題#e#

Four, Australia's economy in 2010 in the face of uncertainty

1, and personal consumption by tightening effect

Australia's labor market has been strong, the unemployment rate since 2000 was recorded nearly 7% of level has been falling, to

In early 2008 when see low 4%. Financial crisis in 2009 years to the unemployment rate rose to 5.8% see top, then fell back quickly, more accidents to may drops to 5.2%, with the United States and Europe has been hovering around 10% unemployment form bright contrast. In the job in May, employment is one month before the 26900 individual rise, already for a third consecutive months up; Since September 2009, Australian employers already added to 280000 new position, the job market fully recovered. The labor market for better help to create positive wealth effect, stimulate consumption; Add the Australian government cash payments to make retailers benefit greatly, retail sales growth in 2009 to 7% in the second quarter.

However, Australia's future personal consumption will face the risk of interest rates. Interest rates go high impact consumer purchasing power, make the Australian retail sales fell echo, retail sales in May of this year by year growth from 2009 in an average 5.9% drop to a only 1.2% (as shown in figure 3 below). Because the central bank expected future will further raise interest rates, to believe that consumers will continue to take the cautious attitude, greatly affect Australia accounted for more than 60% of the economy consumer spending, or a little bit slow the pace of economic growth in Australia.

Figure 3 Australian retail sales

2, the real estate market also faces policy risk

Australian housing shortage in the situation has been pushing prices rise. Land supply shortages, bank of credit to builders from financial crisis also sharply after tightening, make new home construction rates continue to fall; On the demand side, the Australian population growth rate in 40 years of record high, make the houses of the cities 臵 rate more and more low empty. Australian national housing supply committee said Australia's housing demand to about 150000 a year the speed of the set of growth, and supply growth only about 130000, this was more deepen the market thinks the building will be in short supply concerns. With economic recovery and rising stock markets promote asset prices rise, Australia 2010 quarter according to rise in house prices is as high as 20%, up 4.8% on a quarterly basis, already is continuous four quarters to rise.

However, Australia still face real estate market potential risks. The federal government in 2008 the first 臵 high sharply to provide the perks of industry, will existing housing buyers subsidies to $14000 double, new home buyers more greatly raised three times more subsidies to $21000; But the subsidies in January 2010 already recovered to normal a $7000, or will attack the future housing demand. With the end of subsidies, builders by and confidence, building permission first two months this year hold up, march though picks up, but in April turned up for the fall, to press a month in a 6.6% fall.#p#分頁標題#e#

In addition, the Australian central bank since October 2009 benchmark interest rate increase 150 basis points to 4.5%, because the mortgage interest rate corresponding were improved, with an average of $300000 house calculation, the mortgage loan reimbursement specified amount of adding at least a $300 which greatly increased the burden of the person that buy a house. Because of the person that buy a house to the total population of Australia ratio as high as two-thirds, and in 2009 under the low interest rate environment for the government to increase subsidies and buy houses of more than 90% of mortgages are a floating interest rate, the interest rates on the influence of the Australian economy risk is very direct.

Looking in the second half of 2010, the government subsidies in extra end, interest rates continue to rise and credit environment of tightening under the influence of the triple, after the hot real estate market may cool. Although in short supply, house prices fell sharply unlikely, but the sharp gains after in the future or will slow down.

3, the family and the enterprise to lending is still cautious

Another Australia in the face of economic instability for maintaining a weak credit demand. At present the bank lending increase of the main power comes from total bank lending account for about 60% of all home loans, in April to maintain growth in 8% of the level of above; But as the housing market cooling, the future growth may slow down home loans. On the other hand, consumer loans are slowly began to rise, for 15 months after the press year contract, to make it back in January 2010 positive growth in May by annual growth rate of 3.1% (as shown in figure 4 shows).

However, in the enterprise credit, because many enterprises is still in debt period, mainly through equity funds or use cash reserves to reduce debt, so enterprise credit demand is weak. The central bank raised interest rates sharply and Australia, the eurozone debt crisis also make market hedge emotional heating up, make enterprise more reluctant to increase investment. Total bank lending account for about 35% of the enterprise lending continued weak performance, in the month of may still record 5.6% drop in years, already is continuous 11 months of negative growth (as shown in figure 4 shows). Tightening credit conditions, the future economic development will be adverse Australia.

Figure 4 overall bank lending

4, China's economic growth slowed face risk

Australia's strong economic growth can it last, to a certain extent, depends on the development of the Chinese economy. After the outbreak of the financial crisis, the Chinese government and people's bank a harsh fiscal policy and easy monetary policy, in order to ensure steady economic growth. In the government's vigorously promote, China's economic growth has also been the rapid response.

However, with the eurozone debt crisis heating up, global trade or affected; With Europe and the weak demand, has greatly reduce overseas orders, and China is in the future or hit to exports, China in the first quarter of this year 11.9% of strong growth situation believe that won't last. If China's economic growth slowed, will reduce domestic investment, to reduce the demand for raw materials, exports of Australia to pose a serious influence the whole economy.#p#分頁標題#e#

Five, the Australian central bank will slow down the pace

In the second half of 2009, China and other emerging markets for goods long for, not only greatly stimulate Australian exports, commodity prices also spurs related enterprise investment soar. In addition, the Australian employment rise, house prices rose and business confidence picks up, increased the ECB's return to the "normal" interest rate level of pressure, make it a G20 countries in the first one to start the central bank raised interest rates.

Australia's central bank since October 2009 started to take a series of hike, in eight months) increased interest rates six times, benchmark lending rates by a financial crisis to a low of 3% increase to a low of 4.5% in May. After the meeting in June, the central bank to keep the wording of the tendency, in addition to interest rate unchanged at 4.5%, but also indicate as economic slowdown in signs shown stage by stage, the central bank may for several months in interest rates remain on the fence. And as the market

Expected, on July 6, central Banks in the meeting for the second straight month keep interest rates unchanged.

The central bank raised interest rates for the words become more conservative, although Australia in economic reflect the central bank to good environment will tend to continue to tighten monetary policy, but to raise interest rates of speed and strength will be quite cautious. However, due to the short term Australia central bank still face inflation problem, so it is scheduled to be released on July 28, the second quarter of the consumer price index (cpi) will be crucial; If the data showed that inflation is still wandering in the central bank's 2% to 3% target range of the middle of the upper limit of words, the Australian central bank raised interest rates could recover.

Generally, the central bank raised interest rates on Australia has played a cooling effect on the economy, with the past six times the influence of interest rates gradually emerge, believe that in the second half of 2010, the pace of the central bank will be slow and gradual step on the benchmark interest rate in the end of 2010 or early 2011 rise to the central bank think to compare "normalisation" level, that is, about 5% of the level.

Six, a rising power lack

Along with the global economy to step rock bottom, plus Australia than other major countries early step raise interest rates, as a stronger currencies higher, once a popular. The $2009 in February after http://www.ttc-switch.com/dissertation_writing/Ecommerce/2012/0326/1103.html 63 cents to keep, trend reversed, in just nine months soar 31 cents, to 2009 cents on November 94 mark level, or as much as 49%, in November 2009 to April 2010, remains at a $86 cents to 94 cents band.

Later in May 2010, the Greek debt crisis sharp increase, more have spread to other high debt of the euro zone countries sign. Both the eu market concerns and the international monetary fund (IMF) 750 billion euro aid program will not help solve the sovereignty of the euro zone may debt crisis, Germany on May 19 suddenly announced it will strengthen financial supervision and instant banned no coupons vent trading market makes it worries increased risk supervision. Market hedge consciousness soared, make this kind of high $currency from attraction; Add the eurozone debt crisis also could crimp the global economic recovery pace, affect the Australian export performance, make a future is negative. In may, has since the end of April to a $92.4 cents to 84.6 cents tumbled sharply, the biggest drop as much as 8.5%; In the June 7 dropped to 81 cents to touch bottom to rebound, as of June 30 already picked up to the level of 84 cents.#p#分頁標題#e#

Looking in the second half of 2010, a trend will become more complicated. On one hand, once the market risk preference picks up, Australia stable economic fundamentals will support a situation up; But on the other hand, China's policy on the influence of the risk a also not. China's high house prices, the mainland property market regulation measures believe will continue, and believe that the mainland economy will first quarter of this year 11.9% of high-speed growth slowed in the, in the export and Australia will bring certain influence on the whole economy. Moreover, the Australian central bank raised interest rates in the future of the power and speed will corresponding reduced, and the eurozone debt crisis or make global trade overshadowed, drag the Australian economy growth, $limit increase. Therefore believe that a lack of will rise power, in the second half of 2010 will be in 82 to 90 cents band.

Seven, endnotes

As the government economic revitalization plan work, plus China and other Asian emerging market of the mineral rising demand for raw materials, Australia's economic success evaded financial impact of the tsunami, economic recovery speed is significantly better than any other major economy. Looking to the future, Australia will continue to benefit from emerging demand for raw materials, strong labor market also can bring the positive wealth effect of consumers.

However, Australian economy this year will still face the risk of interest rates. Last year the retail and real estate market because of low interest rates and greatly benefit, but rising interest rates to fear affect it, or will drag the personal consumption and housing demand; China's economic slowdown risk also may make raw material needs to slow, affect Australia exports in the performance.

Overall, Australia in the next year or two economic growth will remain relatively stable, is expected to economic growth in 2010 from the 1.4% pace will speed up to about 3%, to 2011 will speed up slightly to 3.5% or so. Inflation will keep rising, but will still remaining in the central bank's 2%-3% of the medium-term target range. The central bank decisions are believed to be more conservative, as the past six times the influence of interest rates gradually emerge, believe that in the second half of 2010, the pace of the central bank will be slow and gradual step on the benchmark interest rate in the end of 2010 or early 2011 rise to the level of about 5%.

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