The Governor of the Reserve Bank of Australia, Glenn Stevens, addressed the House of Representatives Standing Committee on Economics this morning and assured them that things are not as bad as they may think.
He believes that China’s boom is continuing, and said “There is no reason for any downturn to be a deep one.” Stevens believes that Australia has room to cut interest rates further and that the Australian economy is fundamentally strong.
3. – Australia still has room to cut interest rates
4. – Australia is nimble enough to respond to the crisis as it unfolds
5. – The Australian economy is fundamentally in good shape
“We have claimed all along that Australia was better positioned than many countries to ride out the international difficulties” said Stevens. “Our housing sector is not overbuilt; instead there is considerable pent-up demand, and affordability is improving quickly”.
Of course it is hard not to be skeptical given how “suddenly” the so called experts were caught out with the global economic crisis. It’s amazing how many of them have wonderful hindsight – if only their foresight was half as good!