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Tomorrow’s RBA meeting will see a more dovish RBA. The shocking capex data of last week has basically declared the end of its so-called “rebalancing” of the economy from mining to housing and consumption and non-mining investment. As David Uren notes today:
Non-resource investment will fall to its lowest share of the economy since the 1951 recession if the Australian Bureau of Statistics investment survey is correct.
The extreme weakness of business investment makes the Treasury and Reserve Bank forecasts of GDP growth humming along at a rate of 3.25 per cent within the next 12 months look like wishful thinking.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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