SYDNEY (Reuters) – Australia may be destined for another two years of sub-par economic growth as debt-laden households keep their wallets shut tight, though analysts are hopeful lower interest rates and tax handouts would help it dodge a recession.
Economists polled by Reuters forecast Australia’s A$1.9 trillion ($1.3 trillion) of annual gross domestic product (GDP) would expand 2.1% in 2019, down from predictions of 2.2% in the previous poll and 2.7% early in the year.
Growth - % - % - Year - %
Growth was seen picking up modestly to 2.5% in 2020 and 2.6% the year after, though that would still be short of the 2.75% that is considered trend.
The best that could be said was no analyst forecast a recession, with the lowest GDP forecast being 1.0% for 2020.
Run - Quarters - Growth - Decade - %
A run of poor quarters has already seen annual growth slow to its lowest in a decade at just 1.8% as falling house prices and sluggish wages dragged on consumer spending.
The Reserve Bank of Australia (RBA) has reacted by cutting interest rates twice in as many months, taking them to an historic low of 1%, while regulators have eased rules on home loans to free up a log jam in bank lending.
Signs - Home - Prices
Early signs are this has steadied home prices...
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