The year ahead

In the slow news weeks of Christmas and New Year newspapers look back and look forward to fill the space. It provides some useful insights, although rarely are there any predictions which stand the test of time.

The attached article looks at the prospects for the economy for 2013. The analysis is the interesting part - what are the forces at work and how are they expected to affect the performance of the Australian economy and so the standard of living?

Edited highlights:
Growth will continue, but will be slow.
Growth won't be high enough to deliver a Budget surplus.
Monetary policy will react to changes in the real economy, but budgetary policy probably won't.
The Terms of Trade, exchange rate, business and consumer confidence are key factors in determining performance.
World economic activity is key to driving exports, surprisingly only the US and China are mentioned in the article.

Inflation is well under control. A blow to the idiot Abbot who continues to forecast a melt down on this front.

Read carefully, its a great primer for Year 11 or 12, as it summarizes the issues nicely.

The Age article is here