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A recent drop into negative growth in Australia will not be enough to keep the economy from growing above trend in 2017, while growth in the Asia Pacific regions will be limited by developments in the US and China.
Recent Australian GDP figures for the third quarter were “very weak”, ANZ chief economist Richard Yetsenga concedes but he maintains his belief growth in 2017 will be close to 3 per cent.
"We still see the Australian economy growing above trend."
Richard Yetsenga, ANZ chief economist“Yes, growth is a tad weaker in an accounting sense,” he told BlueNotes on video. “Broadly, we still see the Australian economy growing above trend.”
“That contrasts a little with the regional picture where, for most of the small economies, we expect you’ll see some growth acceleration next year – but not a lot, because the [US Federal Reserve] is hiking and China is slowing a little bit.”
Yetsenga said global interest rate movements will be led by the decisions of the Fed, which he expects will move relatively soon and again a couple of times in 2017.
“Because we don’t think US rate hikes will have a big ‘risk-off’ impact globally, it won’t be enough to prevent the curve from continuing to steepen.”
He also touched on the outlook for global currencies and commodities. Watch the video above to find out more.
Andrew Cornell is managing editor at BlueNotes
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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