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Australia not in recession

lionking

In the Peanut Gallery
lionking
Joined
Jan 23, 2007
Messages
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Location
Melbourne
A bit early to pop the champagne corks I know, but Australia is the only advanced economy not in recession (as strictly defined):

http://business.theage.com.au/business/australia-dodges-recession-20090603-buyq.html

Gross domestic product for the March quarter grew a seasonally adjusted 0.4 per cent from the previous three months, the Australian Bureau of Statistics said, bouncing back from a revised 0.6 per cent decline in the final three months of last year.
Analysts had expected the Australian economy to have risen 0.2 per cent in the first quarter, with many revising their predictions to growth from a contraction after yesterday's surprisingly good trade figures for the period.
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I am not at all a fan of the Rudd government, but the $A70billion or so stimulus packages seem to be working so far. Comments? Am I foolishly optimistic?
 
It's a big gamble, because no one can possibly predict or know how to react to the current crises. Certainly, compared to six months ago, there is not the same sense of panic in the air, and the stock market has stabilised. GM has gone bust, but it didn't seem to spook anyone.

Either way, you can guarantee that if the Liberals were in power, they would have done pretty much the same thing, as they all get their advice from Treasury. There would have been a lot of meetings between the Government ministers, Unions and Business leaders to ensure that everyone had a basic agreement on the seriousness of the situation and the need for radical action.

We will end up in recession, though, at some time. This is only just the first battle in what will be a longer campaign. The important thing was to not let everything collapse in a panic stricken mess. Now that that has been achieved, it's on to the long term recovery. The stimulus can only do so much, and unemployment is still rising.
 
Am I correct in understanding that in Oz liberal means what we Usains would call conservative? Is that fiscally or socially liberal?

Good to hear all is well. Maybe I'll have to stake out my own home among the gum trees.
 
lionking said:
I'm not sure we will end up in a recession. China could still be our saviour.
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China's biggest customer is the USA, IIRC. If the US isn't buying from China, China isn't buying from us.

The stimulus worked, but it was a once off. You can't do that too often. It was necessary, but expensive. Interest rates have a few more percent left, but that's about it, too.
 
Thanks. The extent of my knowledge of Australian politics ends Pauline Hanson. But at least it begins with yard glasses.

Do economic tendencies tie in with social tendencies like they tend to do in the States?
 
I am skeptical. Seems like just a simple number game rather than actual economic stability.
 
lionking said:
Economics is a numbers game.
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As he said above, Australia isn't in recession as it is strictly defined. That makes it a numbers game, as that is how recession is defined - by numbers. If you want to go soft, then you need to invent your own touchy-feely definition for when some area is in recession.
 
lionking said:
Economics is a numbers game.
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Har, har, but seriously, the number used is just an artifact of the major crach in imports, which is a sign of the opposite of a healthy economy, firms lowering investments, and predictions of unemployment to continue to rise but gives that happy number for today.
 
The past two posts are correct, but one of the most important factors in a recovery is confidence. The "no recession" news was good and has boosted business confidence here. Whether it will be sustained is another matter.
 
Australia is not in recession because the numbers are too volatile. What the commentators ignore are the facts. Seasonally adjusted GDP went up 0.4%, but the trend figure was down by 0.1%. The next quarter is likely to be -ve. However Australia is doing better than its major trading partners. Not sure why. Maybe because in Australia they did not routinely give housing loans to people who had no documentation, so that housing prices did not collapse, causing the banks to be in trouble. You know the rest.


http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0?OpenDocument
 
foxholeatheist said:
Am I correct in understanding that in Oz liberal means what we Usains would call conservative? Is that fiscally or socially liberal?

Good to hear all is well. Maybe I'll have to stake out my own home among the gum trees.
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Technically yes although if transplanted to America most liberals would become democrats, since you're crazy conservative over there.
 
foxholeatheist said:
Thanks. The extent of my knowledge of Australian politics ends Pauline Hanson. But at least it begins with yard glasses.

Do economic tendencies tie in with social tendencies like they tend to do in the States?
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Are you asking about race? The "old boys club" that tends to run the big end of town tends to be WASP, but that is breaking down, most of Australia is pretty multicultural, then the Aboriginals are still experiencing severe problems.
 
Two good articles in "The Age" today.

http://business.theage.com.au/business/how-australia-avoided-the-meltdown-20090605-byn2.html

http://business.theage.com.au/business/less-anxiety-will-help-see-us-through-20090605-byn7.html

Australia's position to date is a mixture of

* Luck
* Good Policy
* Regulation

Luck in that we had an economy that was already expanding, so there was somewhere sensible to invest without resorting to risk.
Experience from deregulation in the '80s, when a few banks did go under, and some almost did. The corporate memory was able to look back a decade or so and remember that banking involves a good degree of prudence.
Regulation against mergers and take overs of the larger banks means that they can concentrate on banking rather the high risk strategies needed to pursue and prevent predatory behaviour used to expand market share.
 
Apparently, the ABS cheated:

THE March quarter gross domestic product changes very little. In particular, it doesn't change the fact that on any sensible definition Australia is in recession. Nor, more to the point, does it change my view that things will get worse.
The surprise was due to the Australian Bureau of Statistics changing the way it tracks bulk commodity prices. Usually the bureau waits for the major contracts to be settled, and factors in the price changes in the June quarter (because the contract prices are set from April 1). Yesterday it announced that it was factoring in lower prices in the March quarter. Factoring in a lower price implied a higher volume for exports, which lifted GDP. Consequently, net exports added 1.4 percentage points to growth in the quarter. Forget this statistical jiggery-pokery: the key numbers to focus on are national income and domestic demand. Australia's boom was not a GDP boom; it was a national income and domestic demand boom. Yesterday's data confirm that boom is busting. Gross national spending fell by 1 per cent in the first quarter, following a 1.3 per cent fall in the fourth. Real gross domestic income fell by 1.2 per cent in both quarters.
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Linky.

I refuse to believe in your happiness!!! :mad:
 
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