When John Edwards penned his dissertation about the need for less whinging , one institution he could not have had in mind was the Bureau of Resource and Energy Economics (BREE). Regular readers will recall that I’ve given the happy chaps at BREE at bit of a shellacking owing to their hopeful forecasting and today that has been borne out by a huge write down of forecast resources and energy export revenue for Australia in the next year.
Just a few short months ago BREE reckoned we’d be earning $215.3 billion in commodity exports in 2014/15. Now it’s been cut to $201 billion. What’s $14 billion between friends?
They haven’t bothered to correct their forecasts further out and it’s just as well because they’d have been enormous!
Most of the cuts come from the carnage in bulk commodity prices. Iron ore prices have been cut again by $5 to an average of $105 for this year and by $6 to $97 next year. Still far too high and I’ll be writing this post again next year. And the few years after that about LNG.
The net result is iron ore accounts for roughly half the lost income and add the two coals and it’s more like two-thirds:
Full report shredding here.