Klaus Baader, Research Analyst at Societe Generale, explains that the Australian economy did indeed bounce back solidly late last year, after a one-quarter contraction but the rebound was only partial, and there is more to come.
“More broadly, the resource-investment slump is now largely complete, residential investment is likely to continue growing for at least another year, and non-resource, non-residential investment is picking up. Exports, too, look set to expand strongly as resource projects come on stream. Hence, we expect GDP growth to run at an above-potential rate for the next couple of years.”
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