Geldzug: RECESSION O’CLOCK, AUSTRALIA?
4th October 2019 The biggest drivers of GDP growth in Australia are “houses and holes”, i.e. residential construction and resource exports. Residential construction is driven by factors internal to the Australian economy, whereas resource exports depend on the growth of the major global economies, particularly China. House prices and housing starts have been falling since early 2018, but there are recent signs that they are bottoming out. Optimists believe that the Reserve Bank’s two interest rate cuts plus changes in the banks’ prudential requirements will stimulate demand, prompting a recovery in 2020. We are more pessimistic: although house prices are [...]