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Aussie economy facing big global headwinds

Aussie economy facing big global headwinds

Malcolm Turnbull says the Australian economy is facing big headwinds from a sluggish global economy.

Mr Turnbull was speaking ahead of the national accounts which economists expect will show the economy contracted in the September quarter, the first decline since March 2011, which was as the result of adverse weather events domestically and earthquakes in neighbouring New Zealand and Japan, Australia's second-largest trading partner.

Also read: Why we shouldn't pencil in RBA rate hikes until 2018

"We have sluggish growth across the world at the moment and that is one of the reasons why everything we do, every element of our policy has to promote economic growth," Mr Turnbull told reporters in Sydney on Wednesday.

At this stage, economists doubt the economy will remain so weak in the December quarter as to fall into recession - two consecutive quarters of negative growth.

For example, retail spending has picked up in recent months.

The Reserve Bank left the cash rate unchanged at a record low 1.5 per cent at its final board meeting of the year on Tuesday.

Also read: Top industries poised for a strong 2017

Central bank governor Philip Lowe anticipated some slowing in economic growth by year-end "before it picks up again", pointing to a future pick-up in exports as completed resource projects come on line.

Treasury will use the national accounts to form its forecasts for the mid-year budget review, which Treasurer Scott Morrison will hand down on December 19.

Source: AAP

 

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