The quarterly Business Outlook, issued by economic forecaster Access Economics, shows recession imminent and describes the Federal Budget as too reliant on commodities exports, especially as China is our main customer and they have slowed buying.
“A lot of things are buggered because the global economy is in real trouble,” said Access Economics director Chris Richardson. “Four years of boom has collapsed in four months of chaos. That has all sorts of implications here, including for the Federal Budget which has very much been propped by the strong earnings of Australia’s leading exports such as coal and iron ore.”
The forecast includes predictions that house prices will fall by 5–8 percent this year, and that unemployment will reach seven percent.
Federal Treasurer Wayne Swan remarked that there was “no point gilding the lily in any way”. He admitted the coming year would be tough and conceded that neither budget nor the economy would reach previous predictions.
“There’s no quick fix,” he said. “China and other emerging economies, now caught up in this crisis, are expected to slow much more sharply than previously anticipated. There’s no doubt that a slowing China will have a very substantial impact on countries in this region, and most particularly Australia.”