1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > Australia Business Forecast Report Q1 2015

Australia Business Forecast Report Q1 2015

  • November 2014
  • -
  • Business Monitor International
  • -
  • 49 pages

Core Views

We have revised up our real GDP growth forecast for 2014 to 2.8%, from 2.3% previously, given the stronger-than-expected growth rate seen in H114. However, we remain below consensus, and expect growth to slow to 2.3% in 2015 as the strong construction picture struggles to counteract the weakness in external demand.
We expect the Reserve Bank of Australia (RBA) to maintain its cash rate at 2.50% for the remainder of 2014 and 2015, as nominal GDP growth continues its downtrend. The weakening AUD is unlikely to trigger a rise in imported inflation given global disinflationary trends, while macro-prudential policies should help to curtail mortgage lending, which is the only significant driver of domestic inflation. While a relief rally in the AUD looks likely in the near term, with key support at USD0.8650/AUD holding, we maintain that further weakness in likely over the medium term owing to a deteriorating terms of trade picture amid high external indebtedness. We forecast the currency to average USD0.9000/AUD this year and USD0.8500/ AUD in 2015.
The benign trends seen in Australia's fiscal accounts look set to reverse over the coming years, heightening the need for spending restraint. While we are seeing small signs of progress on this front, widespread parliamentary and public opposition to fiscal austerity will prevent significant measures being implemented. We forecast the
FY2014/15 deficit to fall only marginally to 2.6% of GDP, significantly larger than the government's target of 1.6% of GDP. Widespread voter opposition to the government's budget cuts is undermining the Liberal-National coalition's popularity, and reducing the chances of significant fiscal austerity measures being passed.
Economic weakness is likely to feed through to rising opposition support and a further loss of appetite for spending restraint.

Major Forecast Changes

We have revised up our real GDP growth forecast for 2014 to 2.8%, given the stronger-than-expected growth rate seen in H114. However, the ongoing reversal in the country's terms of trade should continue to weigh on medium-term growth. We have revised down our forecast for the AUD slightly, and expect the currency to average USD0.8500/AUD in 2015 (from our previous forecast of USD0.8800/AUD) as lower real interest rates and a high current account deficit cause further currency losses

Table Of Contents

Australia Business Forecast Report Q1 2015
Executive Summary 5
Core Views 5
Major Forecast Changes 5
Key Risks To Outlook 5
Chapter 1: Political Outlook 7
SWOT Analysis 7
BMI Political Risk Index 7
Domestic Politics 8
Our Take On The Budget Debate 8
Widespread voter opposition to the government's budget cuts is undermining the Liberal-National coalition's popularity, and reducing the
chances of significant fiscal austerity measures being passed. Economic weakness is likely to feed through to rising opposition support
and a further loss of appetite for spending restraint.
TABLE: POLITICAL OVERVIEW 8
Long-Term Political Outlook 9
Three Key Challenges: Population, Climate Change, China 9
The Australian political scene is expected to remain stable over the coming decade, although it will still face a number of key challenges.
The most salient are managing population growth, climate change and relations with China.
Chapter 2: Economic Outlook 13
SWOT Analysis 13
BMI Economic Risk Index 13
Economic Activity 14
Growth Downtrend Remains Intact 14
We are revising up our real GDP growth forecast for 2014 to 2.8% from 2.3% previously, given the stronger-than-expected growth rate
seen in H114. However, we remain below consensus, and expect growth to slow to 2.3% in 2015 as the strong construction picture
struggles to counteract the weakness in external demand.
Table: Economic Activity 14
Fiscal Policy 15
Fiscal Tide Turning 15
The benign trends seen in Australia's fiscal accounts look set to reverse over the coming years, heightening the need for spending
restraint. While we are seeing small signs of progress on this front, widespread parliamentary and public opposition to fiscal austerity will
prevent significant measures being implemented. We forecast the FY2014/15 deficit to fall only marginally to 2.6% of GDP, significantly
larger than the government's target of 1.6% of GDP.
Table: Fiscal Policy 15
Monetary Policy 17
Long Pause Ahead For The RBA 17
We expect the Reserve Bank of Australia to maintain its cash rate at 2.50% for the remainder of 2014 and 2015, as nominal GDP
growth continues its downtrend. The weakening AUD is unlikely to trigger a rise in imported inflation given global disinflationary trends,
while macro-prudential policies should help to curtail mortgage lending, which is the only significant driver of domestic inflation.
Table: Monetary Policy 17
FX Forecast 19
AUD: Bounce Likely, But More Downside Thereafter 19
While a relief rally in the AUD looks likely in the near term, with key support at USD0.8650/AUD holding, we maintain that further
weakness in likely over the medium term owing to a deteriorating terms of trade picture amid high external indebtedness. We are
forecasting the currency to average USD0.9000/AUD this year and USD0.8500/AUD in 2015.
TABLE: Exchange Rate 19
TABLE: BMI CURRENCY FORECAST 20
Chapter 3: 10-Year Forecast 23
The Australian Economy To 2023 23
Exports And Immigration Key For Long-term Growth 23
Australia's real GDP growth is expected to remain firm, averaging 2.7% in the 10-year period from 2014 to 2023. In particular, we
believe commodity exports and a renewed interest in skilled immigration will be key drivers in helping the economy return to its trendline
growth of around 3.0% from 2017 onwards, following a slowdown over 2013-2016.
Table: Long-Term Macroeconomic Forecasts 23
Chapter 4: Operational Risk 27
Operational Risk Index 27
Operational Risk 28
Table: Developed States - Labour Market Risk 28
Table: Developed States - Logistics Risk 31
Table: Developed States - Crime And Security Risks 33
Table: Developed States - Trade And Investment Risk 36
Chapter 5: Key Sectors 39
Infrastructure 39
Table:Construction and Infrastructure Industry Data 40
Table: Construction And Infrastructure Industry Data 41
Oil and Gas 43
Table: Oil Production (2012-2017) 44
Table: Oil Production (2018-2023) 45
Table: Gas Production (2012-2017) 46
Table: Gas Production (2018-2023) 46
Other Key Sectors 47
table : Phar ma Sect or Key Indicat ors 47
table: Telecoms Sector Key Indicators 47
table: Defence and Security Sector Key Indicators 47
table: Food and Drink Sector Key Indicators 48
table: Autos Sector Key Indicators 48
table : Freight Key Indicat ors 48
Chapter 6: BMI Global Assumptions 49
Global Outlook 49
Reality Check: Uncertainty Reigns 49
Table: Global Assumptions 49
Table : Devel oped States , Real GDP Growt H, % 50
Table : BMI VERSUS BLOOM BERG CONSENSUS REAL GDP GROWTH FORECASTS, % 50
Table : Emerging Markets , Real GDP Growth , % 51

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Ahmad

+1 718 618 4302

Purchase Reports From Reputable Market Research Publishers
Global Oil and Gas Pipelines Industry Outlook to 2020 - Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Pipelines

Global Oil and Gas Pipelines Industry Outlook to 2020 - Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Pipelines

  • $ 8 000
  • Industry report
  • June 2016
  • by Global Data

Global Oil and Gas Pipelines Industry Outlook to 2020 - Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Pipelines Summary "Global Oil and Gas Pipelines Industry Outlook ...

LNG Yearbook 2016: The Ultimate Guide to Liquefied Natural Gas Infrastructure 2016-2026

LNG Yearbook 2016: The Ultimate Guide to Liquefied Natural Gas Infrastructure 2016-2026

  • $ 6 599
  • Industry report
  • May 2016
  • by Visiongain

Report Details The definitive LNG Yearbook 2016 is the ultimate reference source for the liquefied natural gas industry. The yearbook indicates that the global LNG infrastructure market including large ...

Biorefinery Technologies: Global Markets

Biorefinery Technologies: Global Markets

  • $ 6 650
  • Industry report
  • July 2016
  • by BCC Research

This BCC Research report provides a critical evaluation of the current status of commercial biorefinery markets and the ways in which recent environmental legislation and breakthroughs in technology will ...


ref:plp2014

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.