The sovereign debt problems confronting Europe and the United States won’t have a significant impact on the Australian economy, according to an Organisation for Economic Co-operation and Development (OECD) economist.
The organisation’s deputy director for financial and enterprise affairs, Adrian Blundell-Wignall, said that Australian growth would not be hampered because the regulators have done a good job and the nation is strongly tied to the emerging markets boom.
“The question you really have to ask is whether the fiscal crises of the US and Europe, is that going to have a big enough and negative enough effect on the world to derail the emerging market boom? My answer to that is no,” he said in Sydney yesterday.
“I don’t think it is going to be having a big enough effect on China, Brazil, India, South Africa, Indonesia and so on to really derail their growth.
“Unless the emerging market world is hit by its own internal crisis of some sort relating to inflation, that will affect us more than anything in Europe.”
Emerging markets are expected to contribute more than half of global growth by 2025, from the current one third, the World Bank said in May.
Blundell-Wignall said the Reserve Bank of Australia had managed monetary policy well and kept inflation under control, while the Australian Prudential Regulation Authority has kept local banks out of the global crisis.
“Domestically, we have just been a very well-governed country,” he said.
“Australians probably whinge and moan and think that they haven’t been a well-governed country, but I can assure you they have on fiscal and monetary policy.”
In the past Blundell-Wignall has been Citigroup Australia’s head of equity strategy research and BT Funds Management’s head of asset allocation.
