Business

Our economic demise is a myth

AUSTRALIA is more than just plodding along economically, we are among the world leaders.

And the latest data from HSBC Global Research suggests the Reserve Bank rate cuts are a long way from just rearranging deck chairs on the Titanic.

HSBC chief economist Paul Bloxham said unlike the economies of the United States and the United Kingdom, which were still mired in the leftovers of financial crises, Australia managed to grow 10% in the past four years.

Compared to the US - which managed just 2% and the UK which fell by 2% - he said Australia's growth was leading the developed world.

What was more, these RBA cuts were already beginning to lift house prices out of the doldrums with some signs of growth expected early next year.

House prices fell by 7% in the 18 months to mid-2012 but prices in capital cities has now begun to climb again.

"As multiple cities are seeing an increase, it seems likely that the pick-up reflects interest rates, a common factor across the country," Mr Bloxham said in his "Downunder Digest" report.

"We expect a further increase in housing prices as we move into 2013."

In an interview with APN, Mr Bloxham said the RBA was expected to make one more rates cut before the end of the year.

"We have in mind another cut from the RBA but we don't believe that they will be doing much more than that," he said.

Topics:  cash rate, economy, hsbc, paul bloxham, rba


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