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Improving global growth is likely to deliver positive economic conditions for the Australian economy in 2014, according to one leading economist.
Despite there being plenty of doomsayers, AMP chief economist Shane Oliver said he is cautiously optimistic regarding the outlook for growth.
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Mr Oliver said the 2012/2013 global growth slowdown combined with continuing easy monetary conditions worldwide should allow for strong growth in the coming year.
“As a result of the 2012 growth slowdown, coming at a time when the world had not really fully recovered from the 2009 recession, spare capacity remains immense and so inflationary pressures are low,” he said.
“Global growth is likely to pick up a notch to around 3.5 per cent from 3 per cent in 2013, ranging from 1 per cent in the eurozone, 1.5 per cent in Japan, 3 per cent in the US and 5 per cent in the emerging world, with China at 7 to 7.5 per cent.”
Domestically, factors that include improving confidence and a shift to non-mining sectors are expected to buoy the local economy.
“The combination of a housing recovery, gradually improving confidence, a pick-up in non-mining investment and stronger global growth are expected to result in growth pushing up to around 3 per cent by end 2014,” Mr Oliver said.
