Economy to slow more sharply than Treasurer expects

While we expect the economy hold up a bit better than the Treasurer in the near-term, aggressive policy tightening by the Reserve Bank of Australia will exacerbate the ongoing housing downturn. Accordingly, we expect GDP growth to slow more sharply in the coming financial year than the government is anticipating. Meanwhile, the mulled easing of China’s export ban on Australian coal imports won’t provide a big boost to the economy.