Dear All,
1. Is an Australian Recession Looming, as indicated by the Westpac-Melbourne Institute Economics Leading Index, please? Please the u/m news article from Singapore below.
2. For your further comments and discussion, please.
3. Thank you.
Regards,
Kenneth KOH
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Feb 18, 2009
The Straits Times Newspapers
Australian recession looming
http://www.straitstimes.com/Breaking+News/Money/Story/STIStory_339851.html
MELBOURNE - A MONTHLY economic index compiled by one of Australia's largest banks posted its second negative reading in December, suggesting the country may be headed for recession, economists said on Wednesday.
The monthly Westpac-Melbourne Institute leading index, which predicts the likely pace of economic activity three to nine months into the future, was -1.2 per cent in December, down from -0.4 per cent in November.
Westpac chief economist Matthew Hassan said the reading was well below its long-term trend of 3.5 per cent and had fallen sharply from the 4.5 per cent recorded last July.
Hassan said the fact that the index has stayed in negative territory for two consecutive months may be significant. 'In the past this has been a useful indication of a likely recession in Australia,' he said.
Hassan said the leading index has successfully predicted the last three recessions in Australia, in the mid-1970s, early 1980s and early 1990s.
He said the December reading would have been worse had the government not pumped some A$10.4 billion (S$10.15 billion ) into the economy through a stimulus package that boosted retail spending.
The government approved a second stimulus package worth A$42 billion last month, which is expected to take a few months to filter into the economy.
The package includes A$28.8 billion in spending on schools, housing and roads over four years, tax breaks for small businesses and cash handouts totalling 12.7 billion dollars to eligible workers, farmers and students.
The Treasury estimates the plan will boost economic growth by 0.5 percentage points in 2008-09 and 0.75-1.0 points in 2009-10, supporting up to 90,000 jobs. -- AFP