CommSec has estimated economic growth will lie between 2.75 per cent and 3.0 per cent, while the share market will reach 5,700 points by the end of 2014 and 6,100 points by mid-2015.
The group has also predicted the cash rate will be between 2.5 per cent and 2.75 per cent at the end of 2014 and between 2.75 and 3.25 per cent by mid-2015.
Inflation will be between 2.5 per cent and 3.0 per cent throughout the financial year, unemployment will be in the range of 5.5 per cent to 6.0 per cent, while the Australian dollar will be at 97 US cents by the end of 2014 and 95 US cents by mid-2015, according to CommSec.
CommSec chief economist Craig James said the 2013/2014 financial year has been a very good 12 months for the Australian economy.
“While people may have varying concerns about the Budget, if we take a big picture view it becomes clear that the Australian economy is in a healthy and strong position,” said Mr James.
CommSec said despite Australian shares increasing 18 per cent for the 2013/2014 financial year and 20.7 per cent the year before, there is still a disproportionate amount of capital in cash.
“Research by Investment Trends showed SMSF trustees still hold 25 per cent of SMSF assets in cash which equates to $143 billion,” said CommSec.
“SMSF investors indicate that around 31 per cent or $45 million of these holdings are ‘excess cash’, or cash that would ordinarily be invested in active assets if it weren’t for the current investor sentiment.”
CommSec said this reflects investor sentiment across their personal balance sheets.
