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.