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Melbourne Institute Monthly Bulletin of Economic Trends

Friday 17 October 2008

... Australia likely to weather financial storm ...

The latest forecast coming out of the Melbourne Institute (published in the Monthly Bulletin of Economic Trends) shows a slowing in Australian economic activity over the coming quarters. Growth is forecast to slow to about 2 per cent and the unemployment rate to rise to about 4.8 per cent.

According to Professor Guay Lim, at the Melbourne Institute, "We expect an increase in unemployment, but conditions in the labour market may not deteriorate drastically, as the fall in the Australian dollar, the 100 basis-point cut in official cash rate and the proposed $10bn stimulus package are all expected to kick in to maintain some export growth and domestic spending".

Professor Lim added: “In addition, although price inflation is expected to remain high, wage inflation is not expected to be severe in a climate of rising unemployment. A vicious wage-price upwards cycle, at this stage, is only a remote possibility”.

The latest Melbourne Institute Monthly Bulletin of Economic Trends report can be found at http://www.melbourneinstitute.com/research/macro/bulletin.html

Contact
Professor Guay Lim
Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
Phone : 03 8344 2145
Fax : 03 8344 2111
Email : g.lim@unimelb.edu.au

 

 

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