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Analysts at NAB have not changed their macroeconomic forecasts for Australian economy, but have slightly lowered their near term AUD forecasts.

Key Quotes

“From a higher base (reflecting revisions to history) we see the following factors as key drivers to the outlook. Public sector demand – both infrastructure spending and consumption through the NDIS – will remain strong, and will probably flow over into quite strong non-mining investment.”

“Mining is a potential upside factor to the forecasts, with that sector now clearly reporting the strongest conditions and confidence.”

“The housing cycle will now probably detract a touch more from growth but not more than the usual cyclical swings and roundabouts.”

“Again our main concern remains with consumer spending.”

“The net outcome of the above sees little change to our previously published quarterly growth profile, with GDP growth of   around 3 ¼% in 2018, slowing to 2.7% in 2019 and 2.5% in 2020. That growth profile should see the labour market tighten – we maintain an unemployment forecast of 5% by mid-2019 with risk that this could be achieved sooner.”