Caution in Fitch view

AUSTRALIA is poised to share in the strongest bout of global growth since 2010, according to ratings agency Fitch Ratings, but soft business investment levels and weak inflation will dampen the impact at home.

Global gross domestic product will rise 2.9 per cent this year and peak at 3.1 per cent next year – the highest rate for eight years – as both developed and emerging economies pull in the same direction, Fitch said in a report yesterday.

But Australia is projected to deliver GDP growth of 2.5 per cent this year and 2.6 per cent in 2018, with record low wages growth seen as one of the major handbrakes.

“Elevated temporary employment levels have also dampened employees’ ability to obtain meaningful pay rises,” Fitch said in its quarterly Global Economic Outlook.