Goldman reigns back forecasts
(6 October 2011 – Australia) Goldman Sachs downgraded its forecasts for Australia’s growth on Wednesday after making a string of revisions after further deterioration of Europe’s economy.
Goldman Sachs expected Australia’s real gross domestic product to grow just 1.5 percent in 2011, and lowered its outlook on the country’s stocks and dollar the day after its downward revision on global growth forecasts.
The global bank expects real Australian GDP to grow 1.5 percent in 2011 and 3 percent in 2012, after earlier expecting growth of 1.7 percent and 3.5 percent, respectively.
Underlying inflation is expected to grow 2.6 percent on average in 2011 and 2.9 percent in 2012, down from forecasts of 2.7 percent and 3 percent previously.
"The further deterioration in the economic and financial situation in the Euro area has led us to downgrade our global GDP forecast significantly, from 4.3 percent to 3.5 percent in 2012," Goldman said.
"Over the next few quarters, we now expect a mild recession in Germany and France, and a deeper downturn in the Euro periphery."
Goldman Sachs forecasts 50 basis points of monetary easing by the end of the year from the Reserve Bank of Australia, citing tighter financial conditions, planned fiscal consolidation and a lower threat from inflation.
The global bank expects real Australian GDP to grow 1.5 percent in 2011 and 3 percent in 2012, after earlier expecting growth of 1.7 percent and 3.5 percent, respectively.
Underlying inflation is expected to grow 2.6 percent on average in 2011 and 2.9 percent in 2012, down from forecasts of 2.7 percent and 3 percent previously.
"The further deterioration in the economic and financial situation in the Euro area has led us to downgrade our global GDP forecast significantly, from 4.3 percent to 3.5 percent in 2012," Goldman said.
"Over the next few quarters, we now expect a mild recession in Germany and France, and a deeper downturn in the Euro periphery."
Goldman Sachs forecasts 50 basis points of monetary easing by the end of the year from the Reserve Bank of Australia, citing tighter financial conditions, planned fiscal consolidation and a lower threat from inflation.
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