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Weak exports will see Australian economy shrink by year end

Weak exports will see Australian economy shrink by year end article image

A fall in exports and a decline in business investment will see the Australian economy contract by 0.9 percent in 2009, according to the latest Global Economic and Risk Outlook report by credit reporting firm Dun and Bradstreet (D&B). Lower demand for our exports, leading to a decrease in our terms of trade, and tight credit conditions were the two main reasons specified for the contraction, read the report: "With company profitability hit and investment demand sharply lower, we expect the impact of the worsening terms of trade to drag the economy down further." The report also predicted that 2010 would see gross domestic product grow by 0.7 percent unemployment hit 8.5 percent by the close of next year. D&B chief executive Christine Christian said although the report contained negative data, she expected Australia to remained relatively unscathed from the global downturn. "The government and central bank acted quickly to implement a macroeconomic policy response. Therefore, the economic decline shouldn't be as steep as other developed economies are experiencing," she said. She also noted that recovery in 2010 would be "modest".

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