Pacific Investment Management Company (PIMCO) on the persistent growth story in Australia:
- Australia's economic expansion is on the brink of turning 100 in 2016 - that is, 100 quarters (or 25 years) without a recession.
- Australia has had only three isolated quarters of negative real GDP growth over a quarter of a century
Portfolio managers Rob Mead and Adam Bowe discuss the outlook for Australia and investment opportunities in 2016 at the piece, which is useful background reading on what has happened and what to watch out for in the coming year and years
2016 Outlook: One More Miracle?
- We expect growth, and particularly domestic demand, to remain sluggish in 2016
- Although we are approximately three years into the structural rebalancing away from the mining sector, we still have a couple of years to run
- The headwinds from lower mining investment, slower growth in China and lower commodity prices will continue to blow in 2016 and likely beyond
- With the extent of the macro headwinds Australia faces and the scope of the structural change in the economy as a consequence, we should be alert to the risk of a recession
- When you are riding a bike very slowly, it is much easier to topple off
- However, over the next six to 12 months, we see plenty of evidence that the economy will be rebalancing rather than recessing, and that continues to be our baseline forecast for 2016
There you have it. As easy as falling off a bike :-D
