RE:Australia's economy is showing signs of weakness and public concern is palpable
"201872 published on 2020-01-03 13:08:11
In 2019, Australia's economy, which has been growing for 28 consecutive years, showed signs of weakening. Economic growth slowed in the third quarter of 2019, lower than economists' consensus forecasts, according to the latest data from the Australian bureau of statistics. In December 2019, retail sales in Australia ahead of the New Year holiday hit their lowest point in the past decade. The Australian retail consortium expects sales over the New Year holiday to be the worst in 11 years.In addition to sluggish income growth, Australian consumers are holding on to their pockets because a growing number of people are pessimistic about the economic outlook. A recent online survey by Roy Morgan, a market research firm, found that 40 percent of respondents thought 2020 would be "worse" than 2019, an increase of 26 percent from a year earlier and the highest level since Australia's 1990 recession. Only 12 percent said the economy "would be better." Michelle levin, chief executive of Roy Morgan, said australians' pessimism about the future was rarely so pronounced.Data released by the Australian bureau of statistics showed the economy grew 0.4 percent in the third quarter of 2019, lower than the previous two quarters and below economists' expectations. Bruce hockman, chief economist at the Australian bureau of statistics, even described it as "the weakest annual growth since the international financial crisis".In 2019, the rba cut interest rates three times, the federal government rolled out a massive infrastructure program and proposed a 158 billion Australian dollar ($1) personal income tax cut to counter the downward pressure on the economy, but the effect of these measures did not spread to the private sector and individual consumers. With wage growth chronically low and unemployment rising, ordinary people are increasingly worried about the future of the economy and employment. Data released by the Australian bureau of statistics showed growth in private consumption slowed to 0.1 per cent in the third quarter of 2019, the slowest pace since the fourth quarter of 2008.Exports of liquefied natural gas, iron ore and agricultural products such as beef and mutton are the backbone of Australia's growth. However, some analysts believe that the long-term reliance on exports makes it more difficult for Australia to restructure its economy. With the economy under downward pressure, it is hard for the government to make up its mind to push for broader economic reform.Australian prime minister Tony Morrison has publicly rejected proposals to reform the country's coal industry. In addition, due to the long-term drought and wild fire in Australia in 2019, the space for policy adjustment of the Australian government is very limited under various objective conditions. Economists generally agree that the government's tax cuts and interest rate cuts may not be enough to spur household spending.The analysis suggests that while the Australian economy may not fall into recession, it will be difficult to gain new momentum in the short term. Gary Banks, former chairman of the Australian productivity council, said the government's main focus should be economic reform, not short-term stimulus through higher government spending or lower interest rates."