The SMH BusinessDay reports that Ken Henry, head of the Treasury, is concerned that Australia's recovery is largely due to the stimulus, and is at risk as the stimulus measures are withdrawn.
So where has the strong growth figures come from? Peter Martin of the SMH points out that 25% growth in capital spending by business happened in the ACT! The statistic includes a 36% increase in purchases of passenger cars, and a 43% increase in purchases of four wheel drives! Those 48,000 extra passenger cars and 25,000 extra four wheel drives have inflated the growth figures nicely, and prompted yesterday's interest rate rise, but are they really doing anything for Australia's financial recovery?
It's actually quite frightening to Google "recovery fragile" and seeing how widespread these concerns are, not just the obvious ones like Greece and the UK, but also India, China, and many others.
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