Forecaster Phil Ruthven predicts a pick up in economic activity by December and says that by 2011, Australia will be in the grip of another boom.
The forecaster, who heads up IBISWorld, has been at odds with economists, predicting that Australia could avoid a recession altogether or at worst, experience a very shallow recession.
Now, after the release of the March quarterly figures that show the economy grew 0.4%, Ruthven has told SmartCompany he is very optimistic.
He says where "miserable" economists got it wrong was they missed the fact that exports would stay up longer than usual, with the last of the commodity prices giving us a boost.
"And while expenditure slowed down fast, it didn't crash," he says.
Ruthven says next year is the first year of the recovery for Australia and the rest of the world.
"We've all been scared to death. But 2011 will be a bloody ripper with over 4% growth. There has never been a recovery from a recession that has not been spectacular."
Ruthven says that he expects the economy to come out at "100 miles an hour" as there will be huge pent up demand, particularly at the retail and services level.
"People have put off travelling overseas or getting their hair done every six weeks instead of three: that will all change."
However he is cautious about property. "There was a pause in 2004 before property went berserk and houses were 50% overvalued. I don't see that madness gripping again."
He says while interest rates might fall another quarter of a per cent, it will then turn around and start to climb.
By 2013 into 2014 we will be up to 10%," he says. He predicts there will be a "bit of a recovery on business property, but that never fell much."
"We will see more of a recovery in property trusts."
The bad news though is that the next two quarters will be tough going. The main problem is capital expenditure, which makes up 28% of the economy. "This is very volatile and the stimulus packages won't start to have an affect on that until 2010."
He believes capital expenditure could drag Australia into negative territory in the June quarter. "And that might even continue into the September quarter. Capital expenditure is a lag indicator, like unemployment, and we are only seeing the impact of it now."
Ruthven says all recessions of the last 59 years have been caused by the collapse of capital expenditure not consumption expenditure.
"I wouldn't completely rule out the fact that we won't still have a recession," he says. "But if we do, it will be very shallow and nothing like 1992-93. We are not through the worst yet. We are at the bottom of the U and bouncing along the bottom."
He says we might also see dips in confidence with bits of bad news and difficulties with the export market.
"The rest of the year will be bumpy, but daylight has appeared."
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