Rafah Crossing 'never been closed for one day' from Egypt: PM    Egypt will keep pushing for Gaza peace, aid: PM    Remittances from Egyptians abroad surge 70% YoY in July–May: CBE    Sudan's ambassador to Egypt holds reconstruction talks on with Arab League    Egypt's current account gap narrows, but overall BoP records deficit    Al-Sisi urges accelerated oil, gas discoveries, lower import bill    SCZONE signs $52.6m textile industry deals during China investment tour    Egypt hosts international neurosurgery conference to drive medical innovation    Egypt's EDA discusses Johnson & Johnson's plans to expand investment in local pharmaceutical sector    I won't trade my identity to please market: Douzi    Sisi calls for boosting oil & gas investment to ease import burden    EGX to close Thursday for July 23 Revolution holiday    Egypt, Senegal sign pharma MoU to unify regulatory standards    Famine kills more Gaza children as Israel tightens siege amid global outrage    Kuwait's Crown Prince, Egyptian minister discuss strengthening cooperation    Egyptian Drug Authority discusses plans for joint pharmaceutical plant in Zambia    Egypt's FM seeks deeper economic, security ties on five-nation West Africa tour    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt foils terrorist plot, kills two militants linked to Hasm group    Giza Pyramids' interior lighting updated with new LED system    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Korea Culture Week in Egypt to blend K-Pop with traditional arts    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Australia ties record of 26 years without recession
Published in Daily News Egypt on 07 - 06 - 2017

Australia's economy recorded just enough growth last quarter to match the Netherlands' record of 103 quarters without recession. But analysts warn of a slowdown as households struggle with low wages and high debt.Government data out on Wednesday showed gross domestic product (GDP) rose a modest 0.3 percent in the first quarter, a pullback from the previous quarter's rapid growth of 1.1 percent.
The reading beat expectations, with some analysts predicting a contraction following a category four cyclone in late March as well as weak trade figures and tepid wages growth.
Craig James, chief economist at CommSec said in a note that, in addition to the weather event, the Australian economy had to contend with uncertain geopolitics, the unwinding of the mining construction boom and variable housing markets. "Economic growth has trekked a zig-zag path but the bottom line is that the doomsayers will need to find another target."
Australia last recorded two negative quarters of economic growth in March and June 1991, before enjoying 103 quarters without a recession to equal the record run set by the Netherlands, which ended in 2008.
The resources-rich nation's long stretch of expansion was supported by economic reforms in the 1980s and 1990s, such as the floating of the local currency, a flexible labor market, financial sector and capital markets deregulation and lower tariffs.
The country also benefited from China's economic growth and hunger for natural resources, which led to an unprecedented mining investment boom and record commodity prices.
Clouds on the horizon
Perhaps the most worrying risk to Australia's record is subdued consumer spending as Australians are burdened by record-low wage growth and high levels of mortgage debt. The share of GDP contributed by wages is at its lowest since September 1964.
Household consumption grew at just 2.3 percent in the year to March, half the pace that was considered normal a decade ago. Household debt is a dangerously high 189 percent of disposable income and well above much of the rich world.
To maintain their spending habits Australians are having to save less. The savings ratio dropped to 4.7 percent in the March quarter, a fall of two full percentage points in just a year and the lowest since late 2008.
"A lot of the rise in consumption was because households further reduced their saving rate to a 10-year low," said Paul Dales, chief economist at Capital Economics. "They can't do that indefinitely, so we suspect that slow income growth will soon result in more modest consumption... and signs of a more sustained slowing in GDP growth are emerging."
Central bank stimulus
Currently, Australia is making a rocky transition away from a dependence on mining investment as the boom ends. In the March quarter, net exports detracted 0.7 percentage points from growth.
Also down was property investment, falling by 4.4 percent, as prices in the housing market, particularly in Sydney and Melbourne, suggest the boom of the past is coming to an end.
As a result, the Reserve Bank of Australia (RBA) bank has cut interest rates to a record-low of 1.50 percent since November 2011 to support growth in non-resources sectors. The central bank is expected to remain on the sidelines for some months amid the soft income outlook.
"Overall, today's data are consistent with monetary policy remaining on hold," National Australia Bank economists Riki Polygenis and James Glenn said in a note. "The RBA will look through the volatility [in economic growth], however mixed labour market outcomes and weak wages and inflation data will prevent any hike."


Clic here to read the story from its source.