Australian GDP, inflation, Dollar Forecasts 2012 : Australia's real gross domestic product will grow just 1.5% in 2011, Goldman Sachs said Wednesday, as the bank lowered its outlook on Australia's economy and currency just a day after a downward revision to its global growth forecasts.
Following a cut of its forecasts for the euro, sterling, U.S. stock prices and bond yields and crude oil, Goldman Sachs followed through with a series of Australian cuts, which also included a cut to its forecast on Australian inflation.
The global bank now expects real Australian GDP to grow 1.5% in 2011 and 3.0% in 2012, after earlier expecting growth of 1.7% and 3.5%, respectively. Underlying inflation is now expected to grow 2.6% on average in 2011 and 2.9% in 2012, down from forecasts of 2.7% and 3.0% previously.
Australia's currency, which surged to three decade highs earlier in the year but has recently fallen hard on the back of growing global economic uncertainty, is expected to trade at US$0.95 in three months and US$1.00 in six and 12 months. Goldman Sachs previously expected the Australian dollar at US$1.08 in three months, US$1.10 in six months and US$1.10 in 12 months.
Even with the cut forecast, however, the view does project some strength for the currency still in the coming months. The Australian dollar recently changed hands at US$0.9541.
"Our forecast of a return to parity for the (Australian dollar-U.S. dollar) is based on the notion that Asia demand remains intact," Goldman Sachs said.
The forecast comes just a day after Australia's central bank held interest rates steady at 4.75%, but paved the way for a potential rate cut as soon as November. Goldman Sachs forecasts 50 basis points of monetary easing by the end of the year from the Reserve Bank of Australia, citing tighter financial conditions, planned fiscal consolidation and a lower threat from inflation. source online wjs
Following a cut of its forecasts for the euro, sterling, U.S. stock prices and bond yields and crude oil, Goldman Sachs followed through with a series of Australian cuts, which also included a cut to its forecast on Australian inflation.
The global bank now expects real Australian GDP to grow 1.5% in 2011 and 3.0% in 2012, after earlier expecting growth of 1.7% and 3.5%, respectively. Underlying inflation is now expected to grow 2.6% on average in 2011 and 2.9% in 2012, down from forecasts of 2.7% and 3.0% previously.
Australia's currency, which surged to three decade highs earlier in the year but has recently fallen hard on the back of growing global economic uncertainty, is expected to trade at US$0.95 in three months and US$1.00 in six and 12 months. Goldman Sachs previously expected the Australian dollar at US$1.08 in three months, US$1.10 in six months and US$1.10 in 12 months.
Even with the cut forecast, however, the view does project some strength for the currency still in the coming months. The Australian dollar recently changed hands at US$0.9541.
"Our forecast of a return to parity for the (Australian dollar-U.S. dollar) is based on the notion that Asia demand remains intact," Goldman Sachs said.
The forecast comes just a day after Australia's central bank held interest rates steady at 4.75%, but paved the way for a potential rate cut as soon as November. Goldman Sachs forecasts 50 basis points of monetary easing by the end of the year from the Reserve Bank of Australia, citing tighter financial conditions, planned fiscal consolidation and a lower threat from inflation. source online wjs
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