Reserve Bank of Australia governor Glenn Stevens says slower economic growth is likely to be the norm and warned both major parties not to deviate from commitments to return the budget to surplus.
“The importance of a strong commitment to fiscal responsibility will, if anything, be heightened in the future, given that significant challenges exist over the medium term in funding government initiatives that the community appears to want,” Stevens said in a speech to economists.
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Stevens also stressed the importance of “principled and consistent” policy-making to help revive business and consumer confidence.
Retail sales figures show consumers keeping wallets shut
Australian shoppers are continuing to keep a tight rein on their spending, according to the latest retail sales figures.
Australian Bureau of Statistics figures show retail turnover barely rose in May, gaining only 0.1%, seasonally adjusted. The bureau also revised down the previous two months, with April now recorded as a 0.1% fall and March a 0.6% fall.
”The broader picture is that while consumers are spending, they are selective with where they spend their money. And retailing has been missing out,” said CBA economist Gareth Aird.
Chinese targeting mining sector
China’s state-owned enterprises and private companies are preparing to buy and invest in distressed mining assets ahead of a forecast return to higher commodities demand, The Australian reports.
It says fund managers, bankers and transactional lawyers are indicating that activity is starting to pick up again.
“Our prediction is that some time in the next six to 12 months, China’s new leadership will ramp up the economy again,” private equity fund manager and China-watcher Jason Chang says.
The Dow Jones Industrial Average closed up 0.38% at 14,988.55 points. The Australian dollar is down 0.02% at US90.86 cents.