From the AFR, following Goldman, Morgan Stanley has sharply lowered its Australian growth forecasts to 2.6 per cent from 3.1 per cent for next year.
Strategist Chris Nicol said weak data from China, a negative bias towards emerging market economies as investors lose confidence in quantitative easing, and what he calls a “now is not the time” moment for Australia are reason enough to downgrade.
“The absence of corporate investment intentions and a muddied fiscal policy outlook pre- the September election means that the necessary pick-up in non-mining sectors is too long dated to return high level indicators such as GDP to above trend levels any time soon.”
Apparently Nicol is not concerned at this stage about a recession. He should be.
Advertisement
