2016: A Most Reasonable Year for the Economy

The Australian economy is in reasonable shape as 2016 draws to a close. Real GDP growth is around three per cent, inflation is 1.5 percent while the unemployment rate is hovering near 5.75 percent. To be sure, it would be desirable if growth was a little stronger and unemployment lower, but given the collapse in mining investment, consumer spending being constrained by record low wages growth and the pressure of global disinflation on local producers, 2016 has been a stronger year than almost all forecasters were anticipating at the start of the year. There are reasons to think that 2017 will also be a reasonably good year for the economy and I examine them in this blog post: (VIEW LINK)