Oliver's Insights - The Australian economy and profits - seven reasons to be upbeat
The Australian economy and profits - seven reasons to be upbeat
Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital
The attached note looks at the outlook for the Australian economy and profits and implications for the Australian share market.
The key points are as follows:
A rebound in the economy in the December quarter confirms that Australia is continuing to grow and avoid recession.
There are seven reasons to be upbeat about the Australian outlook: thanks to a more flexible economy Australia is on track to take out the Netherlands for the longest period without a recession; south east Australia is continuing to perform well; the great mining investment unwind is near the bottom; the surge in resource export volumes has more to go; national income is rising again; public investment is strong; and there are signs of life in non-mining investment.
Economic growth is on track to return to near 3% this year and profit growth has returned to positive after two financial years of declines.
Stronger economic growth and profits are good for Australian assets.
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