Deloitte Access Economics and Australia

Chris Richardson: Deloitte Access Economics' latest Business Outlook stated that, while short-term growth in Australia would likely be modest, the economy was managing to weather most challenges, according to Australian Broadcasting Corporation. Deloitte Access Economics partner Chris Richardson said Australia has kept growing, despite a number of hurdles. "Don't forget that China had a substantial slowdown, that things like iron ore prices and coal prices are well below where they were," he observed. "That combination means that some of the huge construction jobs in mining - they're drawing to a close. "That a pretty tricky backdrop and against that backdrop, Australia actually done very well." China stimulus 'not a permanent solution' The report suggested the rout in commodity prices and softening economic conditions in China would remain the biggest challenges for the domestic economy in the short term. Map: Australia A key economic report has praised Australia performance, given the ongoing slowdown in China and the overall state of the global economy. Mr Richardson said a number of emerging and developed economies would continue to struggle amid the fallout from China economic evolution. "It throwing stimulus money at its slowdown and that not a permanent solution," he said. "It transition will continue to be a challenge for Australia, and although things like iron ore prices are higher than they were, they're not high enough to generate that next round of mining construction projects in Australia." Low rates to continue with 'global inflation taking a siesta' The outlook also said that, with no sign of inflationary pressures on the horizon, Australian interest rates were set to remain low for a long time. Add to that the fact that housing prices are now so stretched, particularly in Sydney, and the report suggested the Reserve Bank would need to take a gentle approach to any interest rate rises. The report stated that, "in a world where there is too much capacity and too little demand, global inflation is taking a siesta". It also noted that the domestic economy was struggling to adjust to the biggest pay cut the world has ever delivered, via slumping commodity prices. (news.financializer.com). As reported in the news.