What’s in store for the Australian economy?

By Greg Bell

The potential for future commercial property investment on the Gold Coast could soon start to emerge, as the latest economic forecast points to improving conditions throughout the country. The OECD believes output growth will gather pace in 2017, while non-resource sector industries will start to prove their value to the national economy.

As Australia starts to get back on its feet after the mining boom came to an end, it seems there's every reason to be optimistic. All the economy needs now is for this to filter through the commercial property market and there's just no telling what position the Gold Coast could find itself in in just a few years' time.

Current conditions in the economy

For an overview of how the Australian economy is performing at the moment, look no further than the Reserve Bank of Australia (RBA). Members of the RBA board meet on a monthly basis to discuss what's going on and make that all-important cash rate decision.

Minutes from the 3 May meeting show that inflation has so far been lower than expected over recent months, which is a result of various different factors. Fuel prices have been falling, plus there's the fact that competition in the retail sector has continued to grow.

While this might mean there's greater competition for retail leasing on the Gold Coast, it also shows that Australia is facing a fair few headwinds at the present time. Add to the mix the fact that the domestic currency has largely been in decline over the past couple of years and there's every reason for policymakers to be nervous.

One of the main areas of concern is that the subdued outlook for the economy presented three months ago has changed very little. Although there's been some rebalancing, there is still a long way to go before the Australian economy is well and truly back on an even keel.

What the future could hold 

Even though the outlook might be far from bright at the moment, the OECD seems to have adopted a much more optimistic view about the future of the Australian economy. It highlighted that non-resources employment is on the rise, although liquefied natural gas (LNG) production will continue to play an important role in future economic stability. In fact, LNG exports have been identified as the one to watch over the next few years in particular.

Another challenge is expected to be the decline in the household savings ratio. More pressure on people's individual budgets will mean they're less likely to be able to set money aside, potentially causing problems for the business landscape along the way.

The OECD identified one of the biggest risks to the Australian economy as being its close links with China. The country has also been through a number of ups and downs over the past few years, delivering heightened levels of uncertainty not only for the Chinese, but also trading allies such as Australia.

Weathering the storm

It is, of course, how Australia chooses to deal with these challenges that will determine its future success. The country has been through its fair share of turmoil, but has nevertheless fared better than some of its counterparts across the developed world.

Then there's the forthcoming federal election. Australia is preparing to elect yet another prime minister, which is likely to only add to feelings of uncertainty.

The coming months will be a telling time for the Australian economy and providing the nation comes out fighting, there are high hopes its recent success will continue for many years to come.

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