Australia will be the only OECD country expected to expand this year, according to Russell Investments’ November 2009 Market Barometer.
The Australian economy is tipped to record GDP growth of +0.8 percent for 2009, on the back of a strong banking system and housing market.
However, despite the optimistic view, barometer author Andrew Pease, investment strategist at Russell Investments, says we shouldn’t count our chickens just yet.
“Australia’s economy is in better structural shape than just about any other. However there is less cyclical upside than other economies and many of the factors that supported its growth are now unwinding,” he said.
According to the report the financial crisis is over and the global economic recovery is underway. However the debate now lies as to whether the global recovery will be self-sustaining and robust, or the initial bounce in activity will give way to a sluggish, Japan-style, ‘lost-decade’ of growth. Pease believes it will fall somewhere between the two extremes.
“The global recovery is still in the early stages and has further to run. There is still plenty of cash waiting to be reinvested and equity markets do not yet seem to be pricing in an overly optimistic outlook,” Pease said.
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