Australian Economy Will Grow Slowly But Surely

According to a panel of economists — which consists of experts from the financial institutions, consulting firms and universities, as well as industry analysts —Australia’s economy for 2013-2014 will be slow and steady.

As the mining industry has boomed this year, and perhaps, already reached its peak, it is expected to experience a gradual decline in the following year. Unemployment rate will also rise, but will only be minimal.

These experts also predict that Australia may not be able to meet its own growth forecast for the next two financial years, as the economy will not be smooth sailing. They are, however, confident that the country will weather through this with very little consequences.

The panel has done forecast a few number of times, and did a good job at predicting economic trends. Among other economic concerns, they have also said that:

• Export prices vs. import prices is expected to stay steady for the next 12 months, but it could decline to as low as 4.9%, as the cost of mining continue to rise.
• Treasury is optimistic that the mining boom has not yet peaked, but according to the panel, based on the numbers after March, investments have already reached their highest point early in September. This has made the panel less enthusiastic about the mining industry’s growth for the next couple of years.
• Treasury’s own forecasts regarding lowered interest rates, which will boost consumer spending to 3%, has the panel a bit on the edge as well. Based on data, the experts say consumer spending will only rise to 2.4% for the next fiscal year.
• Treasury has predicted a 3% growth for the budget, while the panel puts this at 2.7% only.
• Treasury’s general economy forecast has been pegged at 2.75%, but the panel insists that this will only grow at 2.35%. It will, however, keep its pace steady.