December quarter data shows Australia’s economic growth is improving but competitiveness on an international scale remains a problem, according to Fiducian.
The Australian economy “rebounded” in the final quarter of the 2016 calendar year, Fiducian said, growing 1.1 per cent after a 0.5 per cent contraction in the previous quarter.
Fiducian investment manager Conrad Burge, however, noted that “in broad terms, the country’s international competitiveness has been eroded in recent years” by a number of factors, including high corporate tax rates, over regulation and a union-dominated labour market.
“As the NAB Business Survey for January notes, ‘concerns remain for the longer-term growth picture, as the contribution of LNG exports, temporarily higher commodity prices and the residential construction boom fade’,” Mr Burge said.
Mr Burge said developing markets were poised to reap the most benefit from the International Monetary Funds’ expectations of 3.4 per cent and 3.6 per cent global growth in 2017 and 2018, respectively.
“While the developing world as a whole is forecast to lift from 4.1 per cent in 2016 to 4.5 per cent this year and to 4.8 per cent next year, the developed world is forecast to grow by only 1.9 per cent this year and 2.0 per cent in 2018, up from 1.6 per cent in 2016,” Mr Burge said.
“The developed world continues to experience persistently low rates of growth, reflecting underlying structural problems, most notably a low propensity to invest and historically low rates of productivity growth.”
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