Market Report, "Australia Business Forecast Report Q1 2011", published

New Country Reports research report from Business Monitor International is now available from Fast Market Research
 
Nov. 29, 2010 - PRLog -- In a sign that the pace of economic recovery is weakening, Australia's  real GDP growth came in at a seasonally adjusted 0.5% quarter-onquarter (q-o-q) in Q110, decelerating from the revised 1.1% figure  registered in the last quarter of 2009. We maintain our view that  the Australian economy will suffer from a significant housing price  correction going forward. As home loans make up more than 70%  of total domestic loan portfolio for some key players - Westpac  Banking Corporation and Commonwealth Bank of Australia in  particular - we expect bad debt write-offs in the coming quarters,  which will drag the economy down as lending declines. Thus, we  maintain our bearish outlook for Australia, with growth coming in at  only 2.3% and 1.6% in 2010 and 2011 respectively.    O n the political front, we continue to favour the ruling Australian Labor Party (AL P) over the opposition Liberal-National Coalition in the general elections to be held on August 21. We believe the move by  Prime Minister and AL P leader Julia Gillard to set an early election  date will help the incumbent party retain power for another three years, although we acknowledge a surprise win by the opposition to be a possibility due to the closeness of the election race. Regardless of the winner, the new government may need to contend with an economic  slowdown in 2011, in line with our core view.  We expect the Reserve Bank of Australia to maintain the cash rate at  4.50% over the next few months, before reducing the benchmark rate  by a single 25 basis point cut to 4.25% by December 2010. Indeed,  we are beginning to observe a disinflationary trend in Australia; the  headline inflation figure in Q210 came in at a weaker-than-expected  0.6% q-o-q, slower than the 0.9% increase registered in the previous  quarter. We are factoring in further disinflation for the rest of the year, while keeping in mind the possibility that deflation could occur.    While Australia benefits from a strong legal and institutional framework, the country still needs to invest heavily in its infrastructural network to help ease increasing urban congestion due to sustained  population growth in the 2000s. This is despite Prime Minister Julia  Gillard's statements about controlling population growth as part  of building a 'sustainable Australia' in the run-up to the August  2010 elections, in contrast to her predecessor Kevin Rudd's proimmigration 'Big Australia' policy. Over the next decade, we believe foreign workers will continue to feature strongly in the country's economic performance, helping Australia fulfil its growth potential.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/96343_australia_business_forec...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
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