The German-Australian Chamber of Industry and Commerce was delighted to welcome more than sixty guests to a Networking Luncheon with an Economic Outlook by HSBC’s Chief Economist for Australia, New Zealand and Global Commodities, Paul Bloxham.
Hosted by our Executive Member HSBC, guests were greeted at 12pm with a delicious buffet luncheon at the RACV City Club. After our guests had the chance to engage in some networking and enjoy some lunch, our Melbourne Branch Manager Tina Thoms welcomed the guests on behalf of the German-Australian Chamber. She thanked HSBC for their kind support before handing over to Brendon Green, State Manager Victoria and South Australia, HSBC Bank Australia Limited who explained HSBC’s strong footprint in Germany and introduced the guest speaker Paul Bloxham.
Key points from Paul’s presentation*
• Generally speaking, it’s a more challenging environment than last year. There is three main reasons for the global slow-down: First, financial conditions have been tightening. Second, the impact of the fiscal stimulus on US growth in 2018, including a substantial corporate tax cut, is set to fade, slowing US growth. Thirdly, the effects of trade tariffs and the threat of further trade protectionism have weighed on growth, with indicators of trade and manufacturing sector activity broadly declining, including in China and the US.
• HSBC's economics team sees global growth slowing from an above-average 2.9 per cent in 2018, to 2.6 per cent in 2019 and 2.4 per cent in 2020.
• For Australia, weakening global growth presents a challenge, but the key is what happens to China's domestic demand and commodity prices.
• Despite the gloomy media coverage, the housing price correction has been orderly so far. This largely reflects that the labour market is tightening, with the unemployment rate around a six-year low at 5.1 per cent. A tight labour market has also supported consumer spending. However, a key risk to the outlook is that the weakening housing market begins to weigh on the consumer.
• Politics is also expected to play a bigger role in 2019, with an election due by 18 May. A boost in government spending is expected to support growth, particularly on transport and social infrastructure.
• With support from the mining sector, a positive labour market and an expected fiscal boost, HSBC’s economics team expects Australia's growth to be 3 per cent in 2019, but the risks are tilted to the downside.
We would like to extend our sincere thanks to our Executive Member HSBC for hosting this insightful lunch event, and of course to Paul Bloxham for taking time out of his busy schedule to provide us with some current insights to the ever changing economy.
*Source: ,Australia must ride out a slowing tide, - Financial Review Opinion piece by Paul Bloxham, 9 January 2019
18/02/2019