The year 2016 has started in a similar fashion to 2015 with global uncertainty, volatility in the financial markets dominating the headlines and overshadowing a sustainable growth story in Australia, according to experts.
Urbis chief economist and director Nicki Hutley, who was speaking at the Australian Property Institute and Real Estate Institute of Victoria State of the Market, noted that bad news has consumed all the attention, including those of world leaders.
Hutley said the economy, chronic fiscal imbalance, income disparity and unemployment used to rate highly, but these topics have taken a backseat as global leaders shift their focus onto immigration, interstate conflict and continued failed action on climate change.
Hutley acknowledged there were risks in the global economy, namely the GDP slowdown in China, crisis in the Euro zone and Japan, where policymakers have adopted a negative interest rate in order to stimulate the economy.
Director of Economic and Social Advisory Nicki Hutley presents at the Australian Property Institute’s Victorian State of the Market event.
Despite those concerns, global real GDP growth is expected to track above the long-term average of 3.4% in the coming year. Although it would be led by the emerging markets and developing economies, rather than advanced economies, where the rate is forecast to over just over 2% over the next four years to 2020.
Hutley said Australia is well placed, with a GDP growth forecast around 2.5% or even 2.75-3% over the coming 12 months period, driven by increased exports due to the lower Australian dollar, business investment outside of mining picking up slightly, the housing market and modest consumer spending.