The Botox Boom is already peaking

Readers will know that for some time MB has put forward the proposition that the much touted infrastructure mini-boom is a short term phenomenon owing to this kind of investment only adding to growth while the amount being spent is increasing. It’s no good remaining on a high plateau of spending, it must increase every to add to growth. The following ANZ chart shows why this is problematic:

This year has seen 0.3% to 0.4% added to GDP from this source, 20-25% of all growth. But next year it fall to roughly 0.1%, even less in 2019 and then begin to take away from growth at double that pace.

Well, Credit Suisse is putting forward the notion that the peak may already be in:

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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.