CHEERS! GLASS NOW HALF FULL
AT long last it seems as though average Australians are emerging from a state of “determined pessimism” (as the Reserve Bank boss describes it) and starting to think “glass half full” (no longer half empty) when it comes to the economy and their wellbeing.
As regular readers would know, we’ve been concerned about the negativity of Australians who have tended to see us as closer to Greece than the economic miracle that we are. Yes, we can always do better, but we’ve had it pretty good for a long time.
No wonder the Reserve Bank kept interest rates on hold last week. There’s no need for a cut now or in the foreseeable, and there is every likelihood the next move in rates will be up. Why?
Consumers are getting more active, reflected in solid rises in consumer confidence and retail sales.
Business confidence and investment is improving on the back of strong housing construction.
The wealth of average Australians has grown strongly thanks to good superannuation returns and rises in house values.
The Australian dollar is down to a level where the RBA is more comfortable, which is good for exporters.
The Federal Budget is looking conservative (and easily achievable, or better) because of the strong retail sales and because iron ore prices (despite the general fall in commodity prices) are holding above the budget forecast.
On top of all this, we haven’t had an economic recession in 25 years.