ANZ Smart Choice Super Investor Update : Investor Update 2012
6 Europe While the ECB’s actions have reduced the probability of a credit crunch and severe economic contraction in Europe, other risks still remain, including a political backlash against economic austerity, a rising oil price and inflation. USA The world’s largest economy continues to improve modestly but we believe a sustained recovery requires a rebound in the housing sector. While there are encouraging signs in construction and affordability indicators, recovery in housing still looks muted at this stage. China and emerging Asian nations China, which has been the cornerstone of recent world growth, has revised official forecasts down to 7.5% GDP growth in 2012. We expect over 8% as global demand recovers. Moderating inflation pressures have allowed its central bank, the People’s Bank of China, to lower interest rates and support strong economic growth which is important during the transition to the new leadership. Financial markets are expecting a recovery in the emerging economies in Asia (many of which are strongly linked to China). Capital inflows since late 2011, together with recent economic data, both point towards acceleration in economic activity in the region. Australia At home, the Australian economy is experiencing a number of diverse and sometimes conflicting forces, including the impact of the energy, mining and infrastructure investment boom. This has spawned a ‘two-speed economy’, wilting consumer confidence and the strong Australian dollar, which has impacted trade exposed industries. In the face of these forces, the Reserve Bank of Australia (RBA) has recently lowered official interest rates to 3.5%. The demand for workers, together with other labour market statistics, gives an indicator of economic health. Recent improvements in the ANZ Job Advertisement Series suggest a cyclical recovery is underway in the Australian economy. We can't yet see strong signals of a sustained recovery in the global economy. There are still many patchy areas which call for an effective policy response from governments to stabilise and further stimulate demand. Without this, the path to recovery will be longer and bumpier.
Member Update Autumn 2013