The largest trading partner, China, is experiencing an economic slowdown that is affecting exports and raising unemployment.
Treasurer Jim Chalmers has expressed concern regarding China’s economy and its effect on Australia’s economic growth.
“A lot of economists around the world are concerned about the Chinese economy right now, and … I share that concern,” he said in an interview with ABC Radio on Friday.
“What we’re seeing … is a very different combination of challenges compared with most of the rest of the world.”
The treasurer claimed that China’s struggling retail industry, anxieties about the real estate market, and local government debt were problems for the superpower.
“All of those things together paint a pretty concerning picture,” he continued.
“We monitor these developments very closely, as you would expect, because in our economy … the two things that will probably matter most to that trajectory will be developments in China but also the impact of these (interest) rate rises which are in the system.”
About a third of all Australian exports go to China.
The recent decision to remove tariffs on Australian barley after three years has boosted exports to China.
Tariffs on other goods that are subject to trade restrictions, such as wine and lobster, are anticipated to be removed as well.
Dr. Chalmers said that, notwithstanding the effects of China and local interest rate increases, it was anticipated that the Australian economy would continue to thrive when asked about the possibility of a recession.
Two quarters in a row of negative economic growth are considered a recession.
“The Treasury forecasts are for continued growth, but really quite flat growth,” Dr. Chalmers continued.
The real GDP is projected to expand by 0.2% in the second quarter and 1.7% annually, according to ANZ economists.
The economy’s impact of the 400 points of domestic interest rate increases since May of last year will be partially revealed by data that will be presented next week.
Following a 0.8% decline in June, data on retail sales is anticipated to show moderate growth on Monday.
The quarterly data that will be revealed on Wednesday is expected to show a slight increase in construction work completed.
The monthly consumer price index, which will be released on Wednesday, is anticipated to show a 0.8% increase, primarily due to rising electricity costs.
When she makes a statement in Canberra on Tuesday, Michele Bullock, the incoming governor of the Reserve Bank of Australia, will also discuss the status of the economy.
- Published By Team Australia News
