China, not the house price downturn, the major risk to Australia’s economy…

An economic forecaster says China, not the local housing market downturn, could be the major swing factor for Australia’s economy in the year ahead.

Key points:

  • Deloitte Access Economics is forecasting economic growth to be “pegged back” in Australia and across the globe in 2019
  • Report author Chris Richardson says low unemployment means the housing downturn is less dangerous than it otherwise would be
  • A seperate report from CommSec ranking the state and territory economies has Victoria and New South Wales sharing the top spot

In its outlook for the year ahead, Deloitte Access Economics forecasts a “still growing, but slowing” scenario for the global and national economies.

The business outlook report flags that global economic growth “may be pegged back to rather more pedestrian rates through the course of 2019 and 2020”, as the impact of tax cuts fades in the US and China’s slowdown accelerates.

Locally, Deloitte sees mounting challenges from a “mini-credit crunch”, drought and falling housing construction activity but describes it as still “a pretty happy set of circumstances” for Australian businesses and households”.

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