Report4 March 2019Updated one minute ago

Australia: Mixed present, decent future

Australia suffers more from a surfeit of unfulfilled optimism than any genuine issues. Sure, there are some areas of economic softness, and some longer-term structural features that will bear watching over the medium term. But the economy remains one of the most robust in the developed world 

Executive summary

Investors and central bankers are sounding a more cautious note on Australia.

Heavily exposed to the Chinese economy and an unforecastable trade war, the central bank is now hedging its guidance bets and FX markets have rushed to price in rate cuts.

2019 will be a tough year for many economies, and Australia will not be immune.

But for all its issues, the domestic economy is still in good shape and the medium- to longer-term prospects for growth compare favourably to the US or almost anywhere in Europe.

In this report, we attempt to put recent concerns into perspective and explain why we think Australia's long-term outlook is still very promising.