Comprehensive economic update from St George
MONTHLY ECONOMIC OUTLOOK - September 2009
Click here to download the PDF to read the full contents including Australian Econonmic Data and Forecasts.
- The Reserve Bank (RBA) held interest rates steady this month for the fifth month in a row. Rhetoric from the
central bank has continued to be progressively more upbeat, indicating that we are getting closer to an
interest rate hike cycle in Australia.
- The RBA has held back from taking on an explicit tightening bias, despite its more optimistic outlook. It has
indicated that there are still some uncertainties clouding the outlook. In particular, the RBA has highlighted
the risk that domestic spending could be weaker in the second half of this year in those areas of the economy
where spending was pulled forward to the first half of this year. Such uncertainties indicate to us that the
RBA could delay raising rates until next year. This would be when it is more confident about the strength of
the current recovery. Much will depend on the incoming economic dataflow. If the data consistently paints a
picture of an economy that is firming, then a rate hike before the end of this year can't be ruled out.
- In overseas developments, the data from most major economies suggests that major economies are
bottoming or recovering. The Asian economies have continued to improve and have been standout
performers in the global landscape.
- The Australian dollar has continued to be underpinned by favourable growth prospects in Australia, attractive
Australian interest rates, improving risk appetites and the improving outlook for the global economy. On
September 17, the AUD reached a 13-month high of USD0.8775.
- Our special feature article this month is titled "Hot Property". St.George Bank commissioned RP Data, a
leading property analysis firm, to research the suburbs across Australia that are likely to provide the best
value and prospects over the medium to long term. This month's "Hot Property" article identifies 24
locations nationally that are likely to give the strongest value and prospects to homebuyers.
