Nothing Lasts Forever: Not Even 26 years of Economic Growth

07.12.2016 • The Economy

By Kris Sayce – Port Phillips Insider (Australia) –

As Bloomberg reports today:

‘Australia’s economy contracted the most in almost eight years last quarter as construction and government spending slumped. The currency plunged almost half a U.S. cent.’

During the last quarter, the Aussie economy contracted by 0.5%. Analysts had expected a contraction of just 0.1%.

That’s a big miss.

But don’t worry, the Bloomberg report quotes Annette Beacher, head of Asia-Pacific research at TD Securities Ltd:

‘We’re still confident that this is just a perfect storm of negatives and we shouldn’t be talking about technical recessions — we should be talking about what rebound we can expect for the fourth quarter.’

Well, that’s OK then. Nothing to worry about. But, what if Ms Beacher is wrong? What if the ‘perfect storm’ lasts longer than a quarter?

It’s not crazy to think that’s possible. After all, it has been 26 years since the last Aussie recession.

And Australia’s biggest export industry, natural resources, has been in a slump for five years. That’s bound to have an impact on the Aussie economy somewhere.

As we say, nothing lasts forever. Are you prepared for what happens next…?

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