MI eggheads raise forecast

Regular readers will know that I follow the Melbourne Institute Monthly Bulletin of Economic Trends, a dour document that is quite useful in keeping the boffins at Treasury and the RBA honest given they are similarly styled economists without the need to gild the lilly.

The MI view was much the same as that of MB last year, that the economy was much weaker than was being presented by officials.

In this latest installment, their February edition, they have raised their GDP forecast for this financial year 0.1% to 2.8%. Still well below trend. This is despite remaining quite bearish on Europe. Such is possible because even here, in the hallowed halls of tenured academia, it seems inconceivable to all that China could overshoot its slowdown by even a few percentage points.

MBET_Feb2012

Comments

  1. raising forecasts?? FFS!

    you mention that they can’t conceive events in China matching the bearishness of this blog but where are they on housing here? Even steady as she goes in China things look ordinary here.

  2. Use Google Trends to look at the search trends for
    Sydney Real Estate
    Narrow it to searches from Sydney.
    Look at the proportion of searches in Chinese.
    Look at the overall downtrend in interest in Sydney Real Estate.

    As an aside, I went to a residential auction in Concord. Two bidders only. No urgency among the buyers. I was staggered compared to auctions I went to 12 months ago where there was much more buyer interest.

  3. Love the table of international Economic Activity.

    With so many countries either recessionary or slow, the outlook is not good.

    The employment forecasts for NSW and Vic can best be described as almost flat, but both forecasts are well within their margins of error.

    Full time employment growth rarely stays flat YOY for any length of time. It continues to fall in most cases. It certainly feels like it is going to contract in NSW and Vic at present.

    And now the banks have increased home loan rates and petrol prices are rising, while companies are announcing layoffs.

    Hello fear!

    Goodbye discretionary spending!