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By Wayne Cole
SYDNEY (Reuters) – Analysts downgraded their forecasts for Australian economic growth after disappointing numbers last year, but their results are still solid, even in the face of falling real estate and housing prices. slowdown in China.
Economists polled by Reuters predict Australia's annual gross domestic product (GDP) to rise to $ 1.87 trillion ($ 1.34 billion), up 3.0% in 2018, compared to 3.2% in October.
The rating downgrade reflects a surprisingly mild result in the third quarter of last year, which has spoiled what had been a solid first half. Data for the fourth quarter are not expected before the beginning of March, although there are signs that growth may be moderate at best.
The economy should then be around 2.7% by 2019 and 2020, extending the country's 26-year period without a recession.
This was a slight decrease from the 2.8% recorded in the previous survey, but it would be a decent result given the headwinds gathering at home and abroad.
Falling real estate prices combined with weak wage growth to dampen consumer spending and dampen the outlook for housing construction, which had been a driving force behind the economy.
Abroad, recent data suggests that China is slowing down in the face of a prolonged trade war with the United States. China is the largest export market of Australia. [ECILT/CN]
Yet Australia's commodity exports have suffered little damage, thanks to the strength of the iron ore, coal and tourism sectors, helping to generate 11 consecutive months of trade surpluses.
The country has also recently become the world's largest exporter of liquefied natural gas, worth tens of billions of dollars a year.
Crucially, the economy is supported by rapid population growth of 1.6% per year, double the average of rich countries, which has triggered a boom in infrastructure spending.
"Significant infrastructure spending and strong trade flows contribute up to 2 percentage points to annual GDP growth," said Annette Beacher, chief macroeconomic strategist for the Asia-Pacific region at TD Securities. .
"The consumer only needs an extra 1 percentage point to achieve above-trend growth."
The Reserve Bank of Australia (RBA) is doing its part by keeping interest rates at a record level of 1.5% and has said it will further decrease if this is absolutely necessary.
The Liberal-National government is also expected to propose tax cuts and more spending before the election, likely in May because it is behind in the polls.
Fortunately, there are many recovery opportunities, with underlying inflation remaining well under control, having exceeded the target range of 2 to 3% of the RBA for 11 consecutive quarters.
The latest poll showed that badysts expected the main measure of consumer price inflation to reach 2.1% for this year and only increase slightly to 2.3% in 2020.
(Other articles from economic outlook surveys 🙂
(Vote by Khushboo Mittal, edited by Nick Macfie)
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