Saturday Sanity Break, 11 May 2019 – Recession coming?
Updated: May 2
Gor blimey comrades, the mighty Reserve Bank of Australia has finally, dragged screaming by its forecasters, abandoned its chirpy economic predictions.
From the overview: ‘GDP growth is expected to be around 2¾ per cent over both 2019 and 2020. This is lower than previously forecast, reflecting the revised outlook for household consumption spending and dwelling activity. Stronger growth in exports and, further out, work on new mining investment projects are expected to support growth. Forecasts for inflation have also been revised lower. Trimmed mean inflation is expected to be around 1¾ per cent over 2019 and then increase gradually to 2 per cent in 2020 and a touch above 2 per cent by early 2021. In the near term, CPI inflation is expected to run a little above the rate for trimmed mean inflation, driven by the recent increase in petrol prices’
‘Global growth moderated in the second half of 2018 and looks to have continued at a similar pace into 2019. The moderation was partly driven by a sharp slowing in global trade, related to slower domestic demand in China and a turn in the cycle in the global electronics industry. The resulting shift in economic momentum has been most evident in the trade-oriented economies in parts of Asia and the euro area. Investment and investment intentions have also weakened in some of these economies.’
And for the final nail in the coffin: ‘Trade tensions remain a downside risk to the global outlook’. Gor blimey, comrades, this seems like traditional RBA understatement, and possibly there prognosticator have been drinking the happy juice. It now looks as if America and China’s game of thrones is likely to end badly. If it does there will be another cut in output growth, with the world entering a serious recession. ‘Welcome Mr Shorten’ will be the cry of Scomo and his troops.
On politics, the general view is that the Coalition has gone from ‘hopeless’ territory to ‘we might just win the unwinnable election.’ Winning is far better than losing, of course, but with the world economy in disarray, this might be a rare case of ‘we dodged a bullet’. Despite Labor’s big spending, big taxing and bigger budget surpluses promises, such an outcome is already done for. Now the mighty RBA has reduced its growth predictions, even blind Freddy can see Labor predictions are tinged with the pink glow of hubris, and if their forecasts are not thrown away by Christmas 2020 I shall eat a meat pie with a knife and fork.
Fiona Prior has a weekend of mixed delights. A Saturday evening spent at William Yang PARTY (verb) and Sunday perusing this year’s Archibald, Wynne and Sulman Prizes. More here.
The sporting life.
Caaarlton! takes on the might of Collingwood today, and after their dismal performance against North Melbourne last weekend are seemingly bereft of a win, or even a loss by a few points as have happened twice this season, showing or boys are far better, and only need a big win to begin to believe in themselves.
The Blues ran out of gas and Collingwood stepped up a level after Caaaaarlton! hit the front in the last quarter. Great effort lads and soon you will be winning more games.
I will update this record if I am not too despondent, comrades.