The Reserve Bank has revised its June 2013 GDP forecast, now expecting the economy to slow due to falling commodity prices and a slowdown in the resources sector.
It had previously forecast GDP to grow at by 2.75% to 3.25% in 2013, but it now expects GDP to grow at just 3%.
According to the RBA’s quarterly statement on monetary policy, the resources sector is mainly to blame for the change.
“The downward revision to mining investment reflects the effect of the recent decline in bulk commodity prices on mining companies’ cash flows and their plans for spending,” the RBA said.
The RBA also said the government’s effort to return the budget to surplus could talk as much as 0.75 and 1.5 percentage points from GDP growth in the current financial year.
“The Australian government’s fiscal consolidation appears to be weighing on growth over the second half of the year,” it said.
Origin shares fall to five-year lows on profit warning
Origin shares have fallen to five year lows after the company released a profit warning stating that EBITDA could rise by just 5% this year, down from the previous forecast of between 5-10%.
”We have a federal scheme and state-based pricing regimes, based on prior year charges,” chief Grant King told analysts this morning.
”In NSW, the regulator takes those changes into account in future year pricing, but not the Queensland regulator.”
“This is a much more difficult year to forecast than I’ve experienced.”
Shares flat off yet another weak US lead
The Australian sharemarket has opened lower this morning following a flat result from the United States, as it continues to deliver disappointing results after the presidential election.
The benchmark S&P/ASX200 index was down 32.8 points or 0.7% to 4,451 at 12.10 AEST, while in the United States the Dow Jones Industrial Average was down 121 points or 0.9% to 12,811.3
Lynas shares placed in trading halt
Shares in mining group Lynas have been placed in a trading halt, pending an announcement from the company regarding a capital raising.
The company said the trading halt was necessary to allow the institutional component of the raising to be completed.