Aussie economic recovery ‘extraordinary’
November 18, 2009
The latest Westpac-Melbourne Institute survey revealed the economy was rebounding faster than any time since the 1970’s after the release of the leading index of economic indicators showed growth of 5.8% in September, up from 3.8% in August and above the longer-term trend of 3.1%.
The index measures the pace of economic activity three to nine months into the future.
Westpac's chief economist, Bill Evans, said the pace of economic recovery was ‘extraordinary’.
”Growth has accelerated from –5.4% in May to 5.8% in September,” Mr Evans said.
”That is the fastest turnaround in the growth rate of the Leading Index since the economy bounced out of recession in the mid 1970's.”
The sharp uptick in the pace of economic recovery has prompted the bank to revise its growth forecast for Australia, with forecasts for growth now at 4% for 2010, up from 1.75% this year.
The growth in the leading economic activity index was prompted by improvements in three of the four key measures, including US industrial production, dwelling approvals and the share market.
”These gains were partly offset by a contracting effect from the real money supply – partly reflecting credit conditions,” the Melbourne Institute said.
Westpac said the strong result was likely to put pressure on interest rates, with another hike expected before Christmas.
The index measures the pace of economic activity three to nine months into the future.
Westpac's chief economist, Bill Evans, said the pace of economic recovery was ‘extraordinary’.
”Growth has accelerated from –5.4% in May to 5.8% in September,” Mr Evans said.
”That is the fastest turnaround in the growth rate of the Leading Index since the economy bounced out of recession in the mid 1970's.”
The sharp uptick in the pace of economic recovery has prompted the bank to revise its growth forecast for Australia, with forecasts for growth now at 4% for 2010, up from 1.75% this year.
The growth in the leading economic activity index was prompted by improvements in three of the four key measures, including US industrial production, dwelling approvals and the share market.
”These gains were partly offset by a contracting effect from the real money supply – partly reflecting credit conditions,” the Melbourne Institute said.
Westpac said the strong result was likely to put pressure on interest rates, with another hike expected before Christmas.
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