Craig James, CommSec’s Chief Economist recently release his snap-shot views for 2013.
His short points which make good reading if you’re interested in the economy and how it will affect your property investments.
Global Economy: Over the past 30 years, world economic growth has averaged 3.3 per cent. Growth in 2012 was estimated at 3.3 per cent. The IMF expects 3.6 per cent growth in 2013. We believe there are upside risks to that forecast. Emerging & developing nations are the new engines of growth.
United States: The export and housing sectors are driving economic recovery. If Congress fundamentally deals with fiscal issues, confidence will be boosted and economic recovery will continue. Employment is expected to lift over the year as recovery consolidates.
China: A “soft landing” has been achieved. We expect solid, sustainable growth of 8.0-9.0 per cent in 2013. The biggest industrialisation in world history is still in its infancy, presenting wonderful opportunities for Australia in coming years.
Europe: Leaders have embraced a “do what it takes” approach. There are numerous risks but we are hopeful of continued slow progress on debt, banking and budget deficit issues in 2013.
Australia: We expect economic growth in a 2.5-3.5 per cent range in 2013, suggesting “normal” economic growth. Inflation should hold between 2.0-3.0 per cent. Unemployment should hold between 4.75-5.75 per cent, trending lower over the second half of the year.
Housing: Despite a recent trend to greater utilisation of existing property, population growth is firm near 1.5 per cent, rental markets are generally tight and home building has been soft. We tip firmer home building and sales over 2013 with Australian home prices to lift around 3 per cent.