RBA predicts substantial decline in mining investment
Friday, 25 Oct 2013
The future of the Australian economy is likely to be largely shaped by a fall in mining investment, as existing projects come to an end.
Philip Lowe, deputy governor of the Reserve Bank of Australia (RBA), made his comments to the CFA Australia Investment Conference, where he highlighted the extent of the economic impact.
Mining investment relative to gross domestic product is expected to decline by at least three percentage points over the coming years, which should be just about manageable.
However, Mr Lowe identified that the economy will need to be rebalanced, which will involve stronger growth in the export sector as a result of liquefied natural gas projects.
A pickup in non-mining investment will be essential to the overall success of the Australian economy - the RBA anticipates this will take place, with spending reaching high single-digit rates over the next couple of years.
However, the organisation did point out that there are a wide range of uncertainties to be aware of, such as ascertaining an appropriate state capital output ratio for the economy.
Not only this, Mr Lowe emphasised that the rate of depreciation and industry structure will also need to be taken into account as the economy enters the next phase.http://www.ljgrealestate.com.au
Philip Lowe, deputy governor of the Reserve Bank of Australia (RBA), made his comments to the CFA Australia Investment Conference, where he highlighted the extent of the economic impact.
Mining investment relative to gross domestic product is expected to decline by at least three percentage points over the coming years, which should be just about manageable.
However, Mr Lowe identified that the economy will need to be rebalanced, which will involve stronger growth in the export sector as a result of liquefied natural gas projects.
A pickup in non-mining investment will be essential to the overall success of the Australian economy - the RBA anticipates this will take place, with spending reaching high single-digit rates over the next couple of years.
However, the organisation did point out that there are a wide range of uncertainties to be aware of, such as ascertaining an appropriate state capital output ratio for the economy.
Not only this, Mr Lowe emphasised that the rate of depreciation and industry structure will also need to be taken into account as the economy enters the next phase.http://www.ljgrealestate.com.au
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