Monday 25 August, 2008

Australian Economy set to resume strong growth
Domestic demand will overcome jitters in consumer confidence

Leading industry analyst and economic forecaster BIS Shrapnel has forecast a return to strong economic growth in the medium term, once the current episode of ‘overdone pessimism’ has receded. This growth will be driven in part by lower interest rates over the next year, although inflationary pressures from capacity constraints and labour markets will prevent interest rates from falling back to the low levels seen earlier this decade.

BIS Shrapnel’s Long Term Forecasts, 2008 to 2023, predicts interest rates will be lowered during 2008/09. BIS Shrapnel believes the Reserve Bank of Australia (RBA) will not allow the sharp slowdown in retail spending and building approvals witnessed in the first half of 2008 to cause further contraction in employment, spending and investment.

Contact: Richard Robinson