Cautious welcome for national accounts data
The December 2009 national accounts released this week confirm ACCI business surveys which are tracking an emerging recovery and stronger business sentiment over the quarter.
While industry is pleased with the return to growth during 2009, a closer analysis of the data presents a reality check.
Much of the growth in the December quarter is directly attributable to public and private investment, which was heavily supported by government stimulus (the schools building program, first home owners grant and the investment allowance).
That stimulus is progressively being expended, and in the case of the home owners grant and investment allowance has already ceased. In addition, monetary policy stimulus is being withdrawn, with recent interest rate increases leaving the cash rate just shy of the neutral range.
"Growth in the December quarter was fuelled by government stimulus, and even then growth is uneven across the economy. With government stimulus working its way out of the economy and with four interest rate rises in six months, our expectations for the March 2010 quarter need to be tempered. There is no basis to assume that the December 2009 quarter growth carried over into the 2010 as a matter of course," said Peter Anderson, Chief Executive .
"A clearer picture of the true health of the economy will emerge during 2010 as government stimulus recedes."
Source: Australian Chamber of Commerce and Industry
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