The Australian economy bounces back - five reasons why some further pick up is likely

Shane Oliver, Head of Investment Strategy and Chief Economist.

The following note takes a look at the rebound in the Australian economy seen in the June quarter and the outlook. 

The key points are as follows:

  • Australian growth bounced back in the June quarter helped by consumer spending, investment and trade.
  • There is good reason to expect growth to pick up further going forward: the drag from mining investment is fading, non-mining investment is looking better, public investment is strong, trade is adding to growth and profits are rising again. But growth is likely to be constrained around 2.5-3% and underlying inflation is likely to remain low.
  • Expect the RBA's cash rate to remain low for a while yet and Australian shares to move higher by year end, but to continue underperforming global shares.

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