From national treasures Tim Toohey and Andrew Boak at Goldman Sachs:
In Australia we have adjusted our economic growth forecasts in response to the sharp revisions by our commodity team to Goldman Sachs’ iron ore and coal forecasts and the consequent adjustment to our forecast profile for the Australian dollar (released as part of the FX Analyst last week). In short, we still expect economic growth in 2015 to average 2.0%; however, we now lower our 2016 GDP forecast from 3.0% to 2.25% and lower our 2017 forecast from 3.5% to 3.25%. We now forecast sharper declines in investment and a steeper fall in Australia’s terms of trade. We also expect Australia’s current account deficit as a percent of GDP to expand from 2.4% at the end of 2014 to 3.9% by the end of 2015 and approach 5.0% of GDP through 2016 and 2017. This compares with our prior forecast that saw the CAD settling around 3.5% of GDP in 2017.
GS now has a 12 month target of 67 cents for the dollar.
