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
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help financing your investment
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 expert 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, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out