{"id":40846,"date":"2018-11-23T06:37:19","date_gmt":"2018-11-23T11:37:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=40846"},"modified":"2018-11-23T06:37:19","modified_gmt":"2018-11-23T11:37:19","slug":"australias-economy-is-a-house-of-cards-set-for-sharp-downturn-in-2019","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=40846","title":{"rendered":"Australia’s Economy Is A House Of Cards, Set For Sharp Downturn In 2019\u00a0"},"content":{"rendered":"
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Australia’s Economy Is A House Of Cards, Set For Sharp Downturn In 2019\u00a0<\/span><\/a><\/h3>\n<\/div>\n
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Damien Boey, a research\u00a0analyst at Credit Suisse,\u00a0has warned<\/a> that\u00a0economic growth in Australia could\u00a0slow quite sharply next year, raising the prospect that a slowdown could be immient.<\/strong><\/p>\n

Boey expects the recent growth spurt driven by strong infrastructure investment, could fade in the first half of 2019, and the risks associated with housing construction and household spending from the downturn in real estate could signal that the Reserve Bank of Australia’s rate hike cycle would have to be put on hold.<\/p>\n

\u201cOur view is that the economy is overshooting,\u201d Boey said.<\/p>\n

\u201cWe believe that growth will eventually slow as timely leading indicators [such as PMIs] are suggesting.\u201d<\/p><\/blockquote>\n

Boey said infrastructure investments had driven the recent surge in economic activity.<\/p>\n

\u201cWe think that the [economy] is still being supported by infrastructure,\u201d he said.<\/p>\n

\u201cThe latest Access Economics data for Q3 suggest that growth in the stock of infrastructure spending has re-accelerated. And recently, project spending growth has been remarkably positively correlated with the cycle in domestic demand.\u201d<\/p><\/blockquote>\n

While\u00a0actual infrastructure investment has been substantial,\u00a0Boey did not expect the trend to last due to\u00a0the lack of new projects in the pipeline.<\/p>\n

\u201cIn 2018 to date, actual project spending growth has accelerated, even as the project pipeline has thinned out,\u201d he said.<\/p>\n

\u201cIt is in this sense that we think infrastructure spending growth has been overshooting, contributing to the overshooting we are also seeing in domestic demand growth relative to leading indicators,\u201d Boey added.<\/p>\n

\u201cHowever, the more growth in spending we experience today, the more we also eat into future growth, unless policy makers are able to adequately top up the project pipeline.<\/p>\n

\u201cAs the saying goes, \u2018serenity now, insanity later\u2019.\u201d<\/p><\/blockquote>\n

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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Australia’s Economy Is A House Of Cards, Set For Sharp Downturn In 2019\u00a0 Damien Boey, a research\u00a0analyst at Credit Suisse,\u00a0has warned that\u00a0economic growth in Australia could\u00a0slow quite sharply next year, raising the prospect that a slowdown could be immient. Boey expects the recent growth spurt driven by strong infrastructure investment, could fade in the first […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[21635,41,4513,23179,3434,431,534,3086,4318],"class_list":["post-40846","post","type-post","status-publish","format-standard","hentry","category-economics","tag-21635","tag-australia","tag-credit-suisse","tag-damien-boey","tag-house-of-cards","tag-interest-rates","tag-monetary-policy","tag-reserve-bank-of-australia","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40846","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40846"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40846\/revisions"}],"predecessor-version":[{"id":40847,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40846\/revisions\/40847"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40846"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}