Investors
P: 1800 658 404
View full details
Financial advisers
Contact your state account manager or our client services.
View full details
Shopping Centres
For leasing, casual leasing and brand solutions enquiries
Contact Us
Connect with us to stay up to date with news and updates.

LinkedIn

Australian surplus will be delayed: economic update for SMSFs


As the economy continues to rebalance in the wake of the mining downturn, The Reserve Bank of Australia’s (RBA) decision to hold interest rates this month has not come as a surprise. For 2016, the risks on rates are all skewed to the downside – it will be very hard to see the RBA raising rates

We expect that the RBA will lower Australia’s cash interest rate by 0.25% to 1.75% in early 2016.

Australia's Federal Budget deteriorates again with the surplus delayed till 2020-21

On Tuesday, Australia’s Federal Treasurer Scott Morrison provided an update on the Federal Budget (known as the Mid-Year Economic and Fiscal Outlook, or MYEFO.

Key highlights:

Table 1: Budget aggregates

Source: Treasury projections

The Federal Treasury has also provided updated economic activity forecasts (see table 2). It can be seen that:

Table 2: Major economic parameters(a)

Final thoughts

Given Australia’s recent economic activity has been sedate and is likely to remain given the transition after the mining investment boom, this MYEFO Federal Budget announcement just provides confirmation of the current subdued reality.

The new year is expected to bring more of the same in terms of constrained growth in Australia and globally. That is, constrained but gradual growth. This is because conditions for a downturn or conversely, for a surge in growth, aren’t in place. Investors holding a balanced portfolio can expect a return of around 7.5 to 8%.

About the author
Head of Investment Strategy and Economics and Chief Economist at AMP Capital, Shane is responsible for AMP Capital's diversified investment funds. He also provides economic forecasts and analysis of key variables and issues affecting, or likely to affect, all asset markets.
Taking your SMSF to the next level
Download now

Sign up to our newsletter!

Receive regular insights and marketing communications including a weekly update of tending news and market insights that are tailored for SMSF trustees and investors.
Sign me up
AMP's Australian operations are bound by the current Australian privacy legislation which outlines how organisations should manage and use personal information collected and held about their customers. AMP Privacy Policy

Thanks for subscribing

Thank you for subscribing to our weekly highlights newsletter.
Your privacy is important to AMP Capital and we are bound by the current Australian privacy legislation. View our privacy policy
Submit and close

Sign up to our newsletter!

Receive regular insights and marketing communications including a weekly update of tending news and market insights that are tailored for SMSF trustees and investors.
AMP's Australian operations are bound by the current Australian privacy legislation which outlines how organisations should manage and use personal information collected and held about their customers. AMP Privacy Policy
Sign me up Not right now. Thanks

Sign up to our newsletter!

Receive regular insights and marketing communications including a weekly update of tending news and market insights that are tailored for SMSF trustees and investors.
AMP's Australian operations are bound by the current Australian privacy legislation which outlines how organisations should manage and use personal information collected and held about their customers. AMP Privacy Policy
Sign me up