Australia’s economic growth is expected to be among the highest in the developed world next year thanks to mining investment and booming commodity prices, according to a report from the Organisation for Economic Cooperation and Development.
But the report suggests interest rates might need to come down again if Europe’s economic woes deepen.
The semi-annual Economic Outlook pegs Australia’s economic growth at 4% in 2012, with unemployment hovering at around 5.25% for the next several years. According to the OECD, growth numbers are projected to be slightly less rosy in 2013 at 3.2%, though inflation should stay right on target at 2.5%.
The Paris-based group applauded the Reserve Bank’s recent decision to cut interest rates, saying it helps offset negative effects surrounding concerns over the global economy.
The report says developments in Europe are of particular concern, and that its outlook for Australia assumes a baseline case that Europe manages to “muddle through” and avoid any major collapse. The OECD warns, however, that the Reserve Bank should be prepared to drop interest rates “significantly” if Europe’s economic situation gets worse.
The report also suggested Australia has room to boost spending in order to offset a drop in demand brought on by a deepening European crisis, though this would delay a plan to return the federal budget to surplus in 2013.
Flat period for employment
Consumer confidence hits year high
Do you have more than $200k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out