S&P has produced scenario analysis on the effect of China's slowdown on Australia's economy, outlining a base case, medium landing and hard landing

Livewire News

Livewire

S&P has produced scenario analysis on the effect of China's slowdown on Australia's economy, outlining a base case, medium landing and hard landing. Analyst Craig Michaels predicts around a 50% chance that China will achieve the base case soft landing of GDP growth at around 7.3%. He puts the probability of a medium landing of growth at 6.8% at 20-25% and a hard landing with growth tumbling to 5% at 5%. In these scenarios, Australia would still maintain positive growth other than in the hard landing scenario where GDP would fall by 1%. Unemployment is also expected to rise to at least 6% in all scenarios, but up to 10% if China suffers a hard landing. Although most of the figures appear reasonable, the author notes that the terms of trade decline for all scenarios appears too mild given Australia's current positioning. (VIEW LINK)


3 topics

Livewire News
Livewire News
Livewire

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.