ACCORDING TO JP MORGAN, the expected trade war should only shave about 0.07% off Australia’s GDP over the next couple of years.
That is five times less than what is expected for China; and three times less than for the rest of the world.
Australia will benefit from iron all sales to support China’s construction program. Plus, there will be a surplus of Chinese products as a result of the US tariffs.
And any financial stimulus to its economy will merely serve to boost our exports.
The only reason for the Reserve Bank’s recent cut in the official interest rates is because unemployment rose temporarily to 5.2%.
Underneath, things are picking up
For businesses and consumers, the welcome return of the Coalition has already delivered an uplift in the general level of confidence.
And you should start to see that reflected in renewed activity in the property market – both for commercial and residential.
Bottom Line: Provided the federal government keeps a cool head (by not siding with either party), the overall impact on Australia is likely to be minimal – and certainly, manageable.
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