Australian economy to reach cruising altitude

SYDNEY: Australia´s economy is seen cruising at a comfortable click over the next two years courtesy of strength in jobs, business investment and public spending, though miserly wage growth and a heavily-indebted consumer lurk as threats.

Economists polled by Reuters estimated Australia´s A$1.8 trillion ($1.44 trillion) of annual gross domestic product (GDP) expanded 2.3 percent in 2017, unchanged from October´s forecast. That might prove a little low as the most recent reading for the September quarter showed growth up at 2.8 percent and all the economic news for the December quarter has been upbeat. Analysts predicted growth would level out at 2.8 percent for both 2018 and 2019, extending Australia´s already-remarkable run of 26 years without a technical recession.

While the economy might not be firing on all cylinders, there is power in just enough sectors to keep things rolling with the synchronised upturn in the world economy a timely boon. "Australia is set to ride the global growth wave," said Paul Bloxham, chief economist Australia at HSBC.

"We expect GDP growth to pick up from 2.4 percent in 2017 to 3.2 percent in 2018, as rising global demand is supporting demand for exports of energy commodities, high-quality food products, tourism and education.