CBA economic update 130221

1

GDP 3% in 2013Lower rates?

AUD above parity

Michael WorkmanSenior EconomistCommonwealth Bank of Australia - (612) 9118 [email protected]

Australian Institute of Company DirectorsAdelaide

February 2013

www.research.commbank.com.au

2

Important Information

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Please see further disclaimers at the back of this document. Please also view our website at www.research.commbank.com.au for a more detailed disclaimer.

3

Our View

International

Sectors, Rates, building approvals, employment.

Inflation & deflation, wages, consumer spending.

AUD & currencies

– AUD, USD, EUR & JPY forecasts

Contents

4

Our View

Asian economies driving world growth. US & Europe recovering. – US: weak recovery underway, household spending and jobs rising.– China’s growth picking up to 8%,….. iron ore & coal demand still firm.– Composition of global growth still favourable for Australian exports in 2013.

Australia has multi-speed or “patchwork” economy– AUD makes problems for import competing sectors & exporters.– Retail spending running at 3%pa. Large State differences – WA strongest.– Jobs market weakening. Unemployment rate to rise in most States.– Retail themes: lower import prices, internet & selective consumers .

Economic policy and markets– Another RBA rate cut likely in first half of 2013. – Mortgage rates above 6% and staying low through 2014.– AUD above parity against USD, firm against EUR & JPY.

5

The Australian economy continues to outperform other advanced economies.

Growth is above trend (3¼% pa).

Fiscal discipline & Asian trade links critical.

Australia has ranked in the top-3 economies in terms of resilience to economic shocks since the onset of the financial crisis.

Source: Institute for Management Development World Competitiveness Yearbook

Australia: A Resilient Economy

Outperforming & overachieving!

90

95

100

105

110

115

90

95

100

105

110

115

Mar-08 Mar-09 Mar-10 Mar-11 Mar-12

REAL GDP(Sep'08= 100)Index Index

Japan

US

Australia

Europe

UK

NZ

Lehman collapse

6

CBA global growth forecasts have below-trend growth in 2012 but still a favourable skew from an Australian perspective.

World growth of 3.5% likely in 2013 with China & Asia the stronger region again.

Financial volatility likely, driven by EU & US problems.

Australia’s incomes driven by Asia’s firm growth.

CBA Global Economic Forecasts

CBA Global Growth Forecasts2010

(a)2011

(a)2012

(f)2013

(f)

World 5.1 3.8 3.1 3.5United States 3.0 1.6 2.2 2.3

Japan 4.5 0.2 2.4 1.1Eurozone 1.8 1.0 -0.4 0.4

United Kingdom 1.8 0.8 -0.4 0.7

Canada 3.2 2.3 2.3 2.6China 10.4 9.3 7.9 8.1India 8.5 7.8 5.5 6.2

7

Confidence: Consumers & Business Uncertain

Consumer confidence was very weak…….election date confirmed?

Business confidence also poor. Big business worse than small business.

Not Happy Jan?

10

20

30

40

50

60

70

80

-40

-30

-20

-10

0

10

20

30

Jan-04 Jan-06 Jan-08 Jan-10 Jan-12

BUSINESS SURVEYS

PSI, rhs

NAB, lhs

Sources: NAB & Ai Group PSIBusiness confidence

60

100

140

60

100

140

Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12

CONSUMER SENTIMENT

Source: Melbourne Institute

Index Index

Time to buy a dwellingPersonal

Finances 12mo ahead

Consumersentiment

8

Australia: 2013 GDP: 3%

STRONGEST GROWTH OUTLOOKIron ore mining & LNG projects, construction & exports.Mining construction, equipment & services.Infrastructure – roads, rail, water, power, utilities.-related construction, engineering & services.Outbound tourism & internet buying.

MODERATE TO LOW GROWTH OUTLOOKCoal miningStaples – groceries, food, hardwareCafes, restaurants, communications Health, defence & education.Commercial construction, rentals (?) & fit-outsDiscretionary retail – clothing/shoes, cosmetics, a/visual.Manufacturing – metals & wood related.New car sales. Housing construction, alts & adds.

SECTORS WITH DOWNSIDE RISKRetail exposed to internet-based alternativesManufacturing – local car industry, textilesDomestic & Inbound tourism. Some education.

-8

0

8

16

24

-8

0

8

16

24

1988 1992 1996 2000 2004 2008 2012

%%

Mining

Non-miningSource: CBA

THE TWO SPEED ECONOMY(annual % change)

9

China’s growth – drives Australia

Australia’s links to China

China is number 1 trading partner - takes 25% of national, & 70% of WA’s goods exports.

About half of Australia’s exports of $300bn were from WA.

China’s GDP growth is 7.8%pa, and 2nd largest economy in the world.

Demand for energy & raw materials is firm, prices lower. China drives inter-Asian trade.

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25

30

35

0

5

10

15

20

25

30

35

Jan-00 Apr-02 Jul-04 Oct-06 Jan-09 Apr-11

EXPORT SHARES(% share of annual exports)

% %

Japan

China

ASEAN

North America

EU

-4

0

4

8

12

16

-4

0

4

8

12

16

Mar-05 Mar-07 Mar-09 Mar-11 Mar-13

CHINA, US & AUST - GDP %pa

China

US

%pa

Australia

India

0

2

4

6

8

10

12

0

2

4

6

8

10

12

Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13

STATE EXPORTS(Original)

$bn$bn

SA

VicNSW

Qld

WA

10

Australian Interest Rates

RBA cut cash to 3.0%, more coming?

Markets see 2.5% cash by mid 2013.

Australian 3 month bills to 2.6% in 2013.

Markets see weak US growth, EU recession.

Cash rate has averaged 5.0% since 2000.

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3

4

5

6

7

8

9

2

3

4

5

6

7

8

9


INTEREST RATES 2009 - 2013

Cash

3 mth

Variable mortgagerate

% %

3 yrswap

Basic mortgage

rate

11

Australian Swap Rates – past the trough?

Swap rates look to have shifted to higher levels.

3 year fixed rates above 3.1%.

Risks remain in EU………..with occasional “bursts of pessimism” likely.

2

3

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5

6

7

8

9

10

11

2

3

4

5

6

7

8

9

10

11

Jan-92Jan-95Jan-98Jan-01Jan-04Jan-07Jan-10Jan-13

SWAP RATES, 1992 to 2013 %

90 Day Bills

5 Yr Swap

Averages:1992 to 2012

Cash 5.4%3mth 5.5%

5 yr swap 6.5%

Cash

%

2.5

3.0

3.5

4.0

4.5

5.0

5.5

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Dec 11 Mar 12 Jun 12 Sep 12 Dec 12

CASH & SWAP RATES 2013

RBA cash

3yr swap

10yr swap

5yr

3mth

% %

12

Australian Mortgage Rates – 6.5%

SVRs at 6.45%, below the 10 year average of 7.3%. Discounted rates at 5.6%.

SVRs…..for 68% of past 10 years have been in the range 6.4% to 8.1%.

Debt repayments about 8.1% of household income…….below 2007 peak of 10.44%.

5

6

7

8

9

10

11

5

6

7

8

9

10

11


STANDARD VAR. MORTGAGE% %

+/- 1 Std dev'n

% %

Average = 7.3%

2

4

6

8

10

12

14

2

4

6

8

10

12

14

Mar-91 Mar-95 Mar-99 Mar-03 Mar-07 Mar-11

MORTGAGES & REPAYMENTS% %

Mortgage rate

Mortgage payments as %

of H'hold disposable

income

13

Interest Rate Forecasts

Interest rates Cash Rate90 Day

Bank Bill3 Year Swap

5 Year Swap

10 Year Swap

10 Year Bond

Jun-12 3.50 3.49 3.26 3.60 3.98 3.03Sep-12 3.50 3.37 2.96 3.24 3.65 2.89Dec-12 3.00 3.07 2.95 3.30 3.85 3.25Mar 13(f) 3.00 2.80 2.85 3.25 3.75 3.20Jun 13(f) 3.00 2.70 2.75 3.05 3.50 3.00Sep13(f) 3.00 2.60 2.75 3.00 3.45 3.00Dec 13(f) 3.00 2.60 2.85 3.05 3.50 3.10Mar 14(f) 3.00 2.60 3.05 3.20 3.50 3.10

14

SA Housing Construction: Lending Flat.

SA’s new residential construction was 8300 in 2012, the lowest since 2001.

In 2013 in SA, there should be about 7500 houses and 2500 apartments built.

We expect national dwelling approvals to be near the 160k level in 2013, up 10%.

0

250

500

750

1000

0

250

500

750

1000


SA DWELLING APPROVALS(3mth average)

Houses

Multis

0.0

0.3

0.5

0.8

1.0

1.3

1.5

0.0

0.3

0.5

0.8

1.0

1.3

1.5


SA LOANS & BLDG APPROVALS'000s '000s

Bldg Approvals

Construction loans

15

House prices rising. Lending up. Arrears down.

Median house price for Adelaide on CBA data, was $580k, in Dec. 2012.Adelaide house prices flat on a year ago.SA’s Housing arrears levels fell to 0.7% in December 2012.

200

300

400

500

600

700

800

900

200

300

400

500

600

700

800

900

Mar-04 Mar-08 Mar-12 Dec-06 Dec-10

HOUSE PRICES(CBA median house price)

Syd

Adel

Melb

Bris

Perth

Hob

$000s $000s

0.4

0.6

0.8

1.0

1

2

3

4


SA HOUSING LOANS*$bn'000s

Number, lhs

*excl refinancing 3mth avge

Value, rhs

16

SA jobs flat, unemployment rate rising.

National jobs growth weak, about 10k per month. Part rate fell back.SA jobs market is flat. More part-time………..and full-time sliding. SA unemployment rate at 6.1% and headed higher.

475

500

525

550

575

225

250

275

300

325


SA JOBS'000s '000s

Part-time, lhs278k

Full-time, rhs538k

GFC effect

2

3

4

5

6

7

8

2

3

4

5

6

7

8


UNEMPLOYMENT RATES

Victoria

WA

% %

SA

17

SA’s Growth – Moderate.

Consumers driving growth over 2013.

Government capital works fading.

Non-residential construction staying firm.

Mining projects & port in Eyre Peninsula

New housing weak, but set to rise.

Pressure on AUD exposed groups like

manufacturing, exporters & tourism.

State GSP to be near 2%pa next few years.

85

90

95

100

105

110

85

90

95

100

105

110


Index

Consumerspending

Residential construction

IndexSA ACTIVITY(Sep 08 = 100)

State final demand

Business investment

18

Inflation…. 2.6% expected for 2013.

Australian CPI running at 2.2%pa & underlying measures at 2.3%pa.

CPI has 58% goods, 42% services. Goods prices up 1.1%pa, services up 3.6%.

Tradables prices down 0.5%pa, non-tradables up 4%pa.

-2

0

2

4

6

-2

0

2

4

6

Mar-06 Sep-07 Mar-09 Sep-10 Mar-12 Sep-13

INFLATION(annual % change) %

AUD influencedinflation

Non-Tradables (Domestic inflationmainly services)

%

CPI

1.0

2.0

3.0

4.0

5.0

6.0

1.0

2.0

3.0

4.0

5.0

6.0

Mar-06 Mar-08 Mar-10 Mar-12

CONSUMER PRICES(annual % change)% %

Headline

Underlying

-2

0

2

4

6

8

-2

0

2

4

6

8

Sep-06 Sep-08 Sep-10 Sep-12

GOODS v SERVICES(annual % chg)% %

Goods

Services

19

Wages headed towards 3.25% as unemployment rate lifts. Supports rate cut.

SA wages growth sliding to 3%. Private at 3.4%.

Wages Trending Lower: SA near 3%pa.

2

3

4

5

6

2

3

4

5

6


SA WAGES(annual % change)% %

Private

Public

Total

2.5

3.0

3.5

4.0

4.54.0

4.5

5.0

5.5

6.0Mar-08 Mar-10 Mar-12

%pa %pa

Unemployment rate, inverse,

lhs

Total WCI, rhs

Private WCI, rhs

WAGES & UNEMPLOYMENT RATE

20

Consumers: Still Selective About Spending

Ability to spend is OK– Household incomes rising by 4.5%......with wages up 3.5% and jobs up 1%.– BUT…..Wealth position: house prices weak…..shares are rising…at last.– Strong growth in services, internet-based retail, & overseas travel.– But record new car sales (1 million per year for past 3 years) & record travel.

Willingness is in doubt– Consumer or retail caution prevails. – Households still saving 11% of incomes.– Bad news seen more often than good news. Especially on job losses.

Spending leakages are also important– Power costs, health and rents up by more than inflation measure.– Mortgage rates lower. Petrol flat.– More overseas travel, less inbound tourism. Both mean less local retail.– Higher AUD means falling imported goods prices.

21

SA - Retail & Cars

SA’s Retail very weak. Flat on a year ago. SA retail is $1.4bn per month.National Retail is $21.5bn per month, about 31% of ALL household spending.SA’s car sales are up 20% on a year ago to 6.1k/mth.

2.5

3.0

3.5

4.0

0.5

1.0

1.5

2.0


SA NEW CAR SALES(3 month moving average)

Cars, rhs

Commercial, hs

SUVs, lhs

'000s '000s

-4

0

4

8

-4

0

4

8

Jan-10 Jan-11 Jan-12 Jan-13

RETAIL TRADE: SA & RoA(annual % change)

SA

Rest ofAustralia

%%

22

Overseas departures were 690k in November, up 5%pa. 40% above arrivals.

Higher charges in some areas are reducing discretionary spending ability.

Petrol prices not a major restraint on spending….till AUD falls.

More travel, higher bills.

Consumer Caution – leakages?

0.0

2.5

5.0

7.5

1.5

2.0

2.5

3.0


UTILITIES SPEND($bn & % of after tax income)% $bn/qtr

Spending as % ofafter tax income,,lhs

Spending,rhs

0.6

0.7

0.8

0.9

1

1.1

450

550

650

750


AUD/USD & TOURISM'000s AUD/USD

Departures, lhs

AUD/USD, rhs

Arrivals, lhs

60

85

110

135

160

60

85

110

135

160

Sep-01 Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13

PETROL STRESS LEVELSc/l c/l

Criticalprice

Actualprice

Current price

144.4c/l

23

Consumers using credit cards less…..& phones, debit cards more.

Higher cash deposits shows precautionary savings rising.

Saving ratio at 10%, highest since 1980s.

Consumer Caution – deposits to $700bn, up 8% pa.

-5

0

5

10

15

20

-5

0

5

10

15

20

Sep-72 Sep-80 Sep-88 Sep-96 Sep-04

SAVING RATIO% %

-3

0

3

6

9

12

-3

0

3

6

9

12


CREDIT CARD ACTIVITY(%pa, smthd)

Balances

Avge balanceper card

Total Accounts

source RBA

%pa %pa

100

300

500

700

900

500

1500

2500

3500

4500


HOUSEHOLD ASSETS

Dwellings,lhs

Deposits,rhs

$bn $bn

RBA

24

The base case: “muddle through”

Base case is the Eurozone survives. 20% chance that Greece leaves Euro.

2013 has weak recovery with improving financial stability…on cheap money.

Fiscal alignment (lower debt) still the major long term problem for single currency.

EU & Eurozone lessons:

– ECB: central bank will do “whatever it takes” & that reduces default risks.

– Banks have repaid about 33% of cheap ECB money, but credit growth is negligible.

– austerity brings asset deflation, big social problems & high unemployment;

– labour market and other market reforms are still not happening.

The European Threat

25

0.40

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0.90

1.00

1.10

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

Jan-84 Jan-88 Jan-92 Jan-96 Jan-00 Jan-04 Jan-08 Jan-12

USD USD

The AUD cycles 1983 - 2013

AUD floats 12 Dec83 at USD0.90905 March 1983:Labor Party wins election.8 March 1983:AUD devalued10% to USD 0.8549

6-8 February 1985:MX Missile Crisis

14 May 1986Keating “BananaRepublic” comment on radio

Commodity pricesat record lows

28 July 1986:Keating changes foreign investment rules and RBA raises rediscount rate to 16%. AUD hits record low of USD 0.5712 during day and closes at USD0.6155

20 October 1987:Stockmarket crashin Australia

Rising interestrates and higher commodity prices

14 February 1989:Keating commentstalk down AUD

Kuwaitinvaded by Iraq Aug 90

19 December 1991:Keating becomesPrime Minister

August 1991:Failed Russiancoup

26 February 1992:One Nation Statement

Interest rates cut15 times fromJan 1990 to Dec 1993, from 18% to 4.75%

October 1993:Metals prices reachrecord lows. AUD low of USD 0.6410

RBA lifts rates 3 times from 4.75% to 7.5%, from July to Dec 1994.

Commodity prices rising

September 1986 :First downgrade of Australiansovereign debt rating

October 1989 :Second downgrade of Sovereign debt rating

AUD peaks at USD0.9653on 16 March 1984

Strong USD & AUDfalls Oil

prices spike in Gulf War I

July 1998:Metals prices reachrecord lows. AUD low of USD 0.5815

Interest rates cut5 times fromJuly 1996 to July 1997, from 7.5% to 5.0%

June 1997:Asia crisis begins,THB floats

Commodity pricsfalling from June 97

IMF packages for Asia:Markets rally, Jan 98

Japan in recession:JPY & AUD weaken

March 1996Howard Gov’telected

Federal election dates: 5 March 1983

1 Dec 198411 July 1987

24 March 199013 March 199316 March 1996

3 Oct 199810 Nov 2001

9 Oct 200424 Nov 2007

21 August 2010

Average Annual Trading RangeAUD/USD, 1983 - 2012: 13USc

Russian debt crisisRuble devaluedGold falls to USD273/ozAUD low of USD0.5530 on 28 Aug ‘99.LTCM on 23 Sept 98

Commoditiesrecover April 99

May 1999S&P Upgrade

Y2K related sellingOct 99

RBA lifts rates: Nov 1999,Feb, April, May & August 2000

AUD falls to USD0.5075as USD rises.US stockmarkets fall.Oil hits $37/bblAUD low of USD0.4775on 2 April 2001

RBA cash rate changes2 Aug 6.06 Nov 6.258 Aug 07 6 .507 Nov 6.755 Feb 08 7.05 Mar 7.253 Sep 08 7.08 Oct 6.05 Nov 5.253 Dec 4.254 Feb 09 3.25 8 Apr 3.07 Oct 09 3.254 Nov 3.52 Dec 3.753 Mar 10 4.07 Apr 10 4.253 May 10 4.53 Nov 10 4.751 Nov 11 4.506 Dec 11 4.252 May 12 3.756 June 3.502 Oct 3.254 Dec 3.0

RBA lifts rates in May & June ‘02

WTC 11 Sep 01 AUD dip, 0.4840

USD weakensas US shares fall

Oct ‘02Moody’s upgradesAustralia to Aaa

Uridashislift AUD

March ‘03S&P upgradesAustralia to AAA

Oil prices spike until Gulf War 2ends 10 April 2003

S&P Sovereign DebtRating changesAA+ 6 Dec 86AA 24 Oct 89AA+ 17 May 99AAA 17 Feb 03

RBA liftsrates 5 Nov ‘03& 3 Dec.’ 03Commodityprices rising

12 December 1983:AUD floats at USD0.9090

9 Oct ‘04Howard Gov’tre-elected

Oil prices hit $75/bbl Aug 07

Mineral commodity prices at 50yr highs

AUD at 30 year high of 1.108, 27 July 2011.

US sub-primeProblemsAug 07 on

USD weaker Fed cuts rates

24 Nov 07Rudd Gov’telected

Oil prices hit $142/bbl

AUD collapsesas USD rises onSub-prime crisis

RBA cutsrates3 Sep 08, to 8 Apr 09

Commodity prices slump.

AUD low of USD0.6010on 27 Oct 08

Sep 08 Lehman Bros collapse, US Fed cuts to zero, Dec 08.

USD falls asFed does QuantitativeEasing, Mar 09

Commodities & shares recoverstrongly

RBA liftsratesOct 09 to Nov 10

Updated January 2013

World bond markets sell-off on US inflation fears

US & EU growth data weakens, Iron ore prices dip. US Fed says low rates till 2015.

RBA cuts in Nov & Dec 2011, in May ’12, June, Oct. & Dec

26

Above ParityAUD fundamentals supportive:

USD weakness;

high Asian & commodity exposure;

positive interest rate differential;

strong financial position;

AAA rating and sound financial system.

USD & Euro have weak growth & interest rates near zero.

The AUD

0.8

0.9

1.0

1.1

1.2

0.80

0.90

1.00

1.10

1.20

Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14

USDUSD

AUD/USD

AUD/USD FORECASTS

CBA(f)

27

AUD Forecasts – staying above parity against USD.

Exchange ratesAUD/USD AUD/JPY AUD/EUR AUD/GBP AUD/NZD AUD/CHFJun-12 1.02 82 0.81 0.65 1.28 0.97Sep-12 1.04 81 0.81 0.64 1.25 0.98Dec-12 1.04 90 0.79 0.64 1.25 0.95Mar 13(f) 1.06 96 0.79 0.65 1.26 0.98Jun 13(f) 1.07 101 0.77 0.65 1.27 0.97Dec 13(f) 1.08 106 0.77 0.66 1.26 0.99Dec 13(f) 1.08 108 0.76 0.65 1.24 0.98Mar 14(f) 1.05 107 0.72 0.64 1.24 0.94

28

Shares sideways….ASX rising as interest rates cut.

Share markets buoyant. ASX200 expected to be 5500 in June 2013.

Investors prefer high yielding stocks, like Telstra, Woolies, Wesfarmers & the major banks.

1300

1400

1500

1600

4000

4250

4500

4750

5000

5250

May-12 Sep-12 Feb-13

S&P 500 & ASX200

ASX200(lhs)

S&P500 (rhs)

IndexIndex

2000

4000

6000

8000

500

1000

1500

2000

Jan-00 Jan-04 Jan-08 Jan-12

SHARE MARKETS, 2000 - 2013

S&P 500, lhs

ASX200, rhs

29

Population: SA up 17k (1.0%) in June 2012.

SA’s population growth is firm at 17k or 1.0%pa, as migration rises.National population growth at 360k (1.6%pa) gives underlying housing demand =170k.

Rising migration shows national population growth could stay near 360k level in coming years.

Business groups want higher population & workforce growth because of skills shortages.

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25

0

5

10

15

20

25

Sep-94 Sep-97 Sep-00 Sep-03 Sep-06 Sep-09 Sep-12

SA: PEOPLE & HOUSING(annual totals)

Populationgrowth

Dwelling starts

'000s '000s

-10

-5

0

5

10

15

20

25

30

Dec-96 Dec-99 Dec-02 Dec-05 Dec-08 Dec-11

Net Overseas

'000s

Nat Increase

Net interstate

SA POPULATION(moving annual total)

30

Population: National 1.6%.......WA 3.0%.

National population growth at 360k (1.6%pa) gives underlying housing demand of 170k.

Brisbane & Hobart are the only 2 cities where they have about 40% of the State population.

0

20

40

60

80

100

NSW VIC QLD SA WA Tas NT Aust

HOUSEHOLDS IN CAPITAL CITY(% of State total, 2011)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jun-00 Jun-02 Jun-04 Jun-06 Jun-08 Jun-10 Jun-12

POPULATION GROWTH(annual % change)

Tas

Qld

WA

SA

%pa

NSW

Vic

%pa

ABS3101

31

The mining pipeline is dominated by large multi-year projects.

Of the $268bn of committed resource projects, some $195bn is in LNG etc.

The real value of oil & LNG projects is equivalent to the Apollo Moon Program.

Because these projects are of long duration, the peak in mining capex may be more of a “plateau” rather than the usual “inverted V”.

Nevertheless, a major growth driver will ease back.

The Mining Capex Boom

All good things come to an end

0

18

35

53

70

0

18

35

53

70

2007 2009 2011 2013 2015 2017

Other committed

projects

$bn $bn

CommittedLNG projects

MINING CAPEX

Source: BREE, CBA

2013-14

32

CBA Australian Economic Forecasts

2010/11(a)

2011/12(a)

2012/13(f)

2013/14(f)

2014/15(f)

2010(a)

2011(a)

2012(f)

2013(f)

2014(f)

Economic Activity

Private final demand 4.2 6.4 4.4 3.7 2.2 2.4 5.6 5.8 4.1 2.7Of which: H/hold spending 3.6 3.3 2.9 3.1 3.2 3.0 3.3 3.5 2.7 3.1

Dwelling investment 2.2 -3.7 0.3 7.1 3.5 3.5 0.7 -5.2 6.7 4.5Business investment 8.7 22.5 10.3 4.5 -1.4 -0.1 17.7 17.7 7.1 0.8

Public final demand 1.6 1.6 -0.5 -0.8 1.3 7.1 -0.2 1.7 -1.2 0.0Domestic final demand 3.6 5.3 3.3 2.7 2.0 3.5 4.2 4.9 2.9 2.1

Inventories (contrib to GDP) 0.6 0.0 0.0 0.0 0.1 0.6 0.4 0.0 -0.1 0.1GNE 4.2 5.2 3.3 2.7 2.0 4.1 4.5 4.8 2.8 2.3

Exports 0.3 4.6 5.3 6.3 6.9 5.7 -0.8 5.6 6.7 6.0Imports 9.7 11.4 4.1 6.0 4.1 14.3 10.6 6.7 5.5 5.0

Net exports (contrib to GDP) -1.7 -1.3 0.3 0.1 0.7 -1.2 -2.2 -0.2 0.3 0.3GDP 2.4 3.5 3.1 2.9 2.8 2.6 2.4 3.6 3.2 2.5

Prices & WagesCPI 3.1 2.3 2.8 2.8 2.8 2.9 3.3 1.9 3.1 2.8

Underlying CPI 2.5 2.4 2.7 2.9 2.9 2.8 2.6 2.3 2.9 2.9AWOTE 4.2 4.3 3.2 3.4 3.8 4.9 4.4 3.6 3.2 3.7

WPI 3.8 3.6 3.7 3.8 3.9 3.3 3.7 3.7 3.7 3.8Real h/hold disposable income 5.3 3.3 2.2 2.9 3.1 2.7 4.8 2.6 2.4 3.2

Labour MarketEmployment 2.5 1.1 1.0 1.6 1.9 2.2 1.8 1.0 1.1 1.8

Unemployment rate 5.1 5.2 5.5 5.5 5.2 5.2 5.1 5.2 5.6 5.3

External AccountsCurrent Account: $bn -34.3 -42.7 -65.5 -72.4 -64.2 -40.2 -33.3 -58.0 -69.6 -68.1

% of GDP -2.4 -2.9 -4.3 -4.5 -3.8 -3.0 -2.3 -3.9 -4.5 -4.1

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CBA economic update 130221

Economy & Finance

Transcript of CBA economic update 130221