Our economy - the outlook is encouraging
The global economy is expanding albeit at a moderate pace and the global growth forecast by the International Monetary Fund is 3.4% in 2016. The US Federal Reserve is expected to start raising interest rates in the short term as the US economy begins to strengthen.
The continued decline in key commodity prices has seen the Australian dollar fall against the greenback, declining from around $0.82 in early January 2015 to its seven- year low of US$0.6827 in mid- January 2016. It has since trended to US$0.7082 in mid February 2016.
Overall however, the Reserve Bank of Australia (RBA) notes that the global financial conditions more broadly remain "very accommodative".
The Australian economy is experiencing moderate expansion although the GDP growth of 2.5% has been slightly below long term averages. Business conditions are expected to improve.
We have seen stronger than anticipated employment growth with employment increasing by 312,000 over 20151. The increase in employment has contributed to the employment to population ratio rising over the year from 60.6% to 61.4%1. In addition, the unemployment rate has decreased over 2015 from 6.2% to 5.8%1. Stronger employment should boost household spending in the year ahead and further enhance the economy.
