Growth to gain momentum in second half - NAB
Analysts at NAB, expect that the second half of 2017 will see Australia’s real GDP growth further bolstered by a ramp up in LNG exports, but momentum will fade by end - 2018 as LNG peaks and dwelling construction drags.
“Revisions to real GDP growth forecasts this month largely reflect a stronger than expected rebound in coal exports following disruptions from Cyclone Debbie in Q1. Further out, we have not fundamentally changed the tone of our outlook. We still expect lacklustre growth in household consumption, and a moderate cyclical upturn in non - mining investment, while government investment will help to fill some of the void left by mining investment. Growth is forecast to rise from 2¼% in 2017 to around 2¾% in 2018 and 2019, however, this masks some of the volatility in the profile.”
“For 2019, growth is forecast to lift again as non - mining investment and public spending strengthens. Given the lingering risks to the outlook, signs of moderation in the housing market, and a reluctance to see the AUD strengthen further, the RBA should be content with keeping interest rates on hold for an extended period (mid 2019). Recent data flows have however been more encouraging, and if maintained could raise the prospect of a change in the balance of risks.”
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