Key points are as follows
- The Australian economy grew a surprisingly strong 3% through 2015, as non-mining activity and export volumes helped offset the slump in mining investment.
- Growth is likely to slip back to around 2.5% this year, so a further RBA rate cut is still likely, albeit it’s a close call.
- Low interest rates, low petrol prices, the boost from the low $A, the improved performance of “low mining” states like NSW and Victoria and the likelihood that the slump in mining investment is getting close to the bottom are reasons not to get too gloomy on Australia and Australian assets.