Quarterly Economic Outlook – July 2018 | KPMG | AU
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Quarterly Economic Outlook: Global and Australian Forecasts – July 2018

Quarterly Economic Outlook – July 2018

Global growth in 2018 has been strong across most sectors, with a pick-up in private business investment and global trade, and is expected to remain positive for the rest of the year.

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In the July Quarterly Economic Outlook, KPMG Economics is reporting that global growth in 2018 has been strong across most sectors despite losing some of its momentum in Q1 2018.

Closer to home, the Australian economy grew by 1.0 percent q/q (seasonally-adjusted) in the March quarter of 2018 following an upwardly revised 0.5 percent q/q growth in Q4 2018.

Global outlook

  • Global growth has been more broad-based with a pick-up in private business investment and global trade, and is expected to remain strong through 2018 driven by emerging and developing economies in Asia.
  • In the advanced economies, employment remains strong, wage growth has picked up slightly, and the outlook for growth is generally positive.
  • Growth in emerging market economies have returned to rates closer to historical averages but some countries like Argentina and Turkey have come under financial stress over the recent quarter, while growth in India has been strong but growth in China has moderated slightly in line with the Chinese government’s target.
  • KPMG Economics maintains its forecast of global growth with real GDP at 3.9 percent in 2018 and 3.9 percent in 2019.

Australian outlook

  • The Australian economy grew by 1.0 percent q/q (seasonally-adjusted) in the March quarter of 2018 following an upwardly revised 0.5 percent q/q growth in Q4 2018.
  • On an annualised basis, the Australian economy grew at 2.6 percent y/y stronger than the upwardly revised 2.2 percent y/y in Q4 2017. The stronger GDP results for the quarter in part reflects growth in exports of mining commodities which contributed around half of the growth in GDP.
  • The unemployment rate was unchanged at 5.4 percent (seasonally-adjusted) in June 2018, with the Australian economy adding a substantial 51,000 (seasonally-adjusted) jobs in June 2018 bringing the total number of employed people to 12.57 million.
  • Headline inflation increased slightly to 2.1 percent y/y in Q2 2018 (0.4 percent q/q), with underlying inflation remaining steady at 1.9 percent y/y (trimmed mean basis).
  • KPMG Economics expects real GDP in Australia to grow at around 2.8 percent for FY2018 and 2.9 percent for FY2019.

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