Can Australian economy continue to grow in 2007 with the benchmark interest rate set at 6.25%?
Since 1991, when the country had its last recession, the Australian economy has grown an average of 3.25 percent per year. Yet, after sixteen consecutive years of strong growth, many economists are concerned that in the expansion in the world’s 12th largest economy may have peaked. We can’t say we share the same opinion. The latest National Australia Bank Monthly Business Survey, Australia’s most important survey of the non-farm sector, showed that business conditions and employment levels are close to cyclical highs. Unemployment has come down to a 30-year low and business confidence is recovering after falling last year when interest rates were pushed higher. Strong job growth has prompted consumers to spend more, and in February, retail sales rose twice as fast as expected. According to the Australian Bureau of Statistics, retail sales rose 0.9% in February to $18.8 billion, from $18.6 billion in January. Following the release of this key report the Aussie skyrocketed to a 10 year h
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