Market crisis to hit property: Swan
* September 24, 2008 - 10:37AM
The fallout from the global financial market turmoil will put pressure on the Australian economy and hurt the property market, federal Treasurer Wayne Swan warns.
"There is no doubt there is pressure on property markets," Mr Swan told Sky News today.
"There is pressure across the board from the fallout of this subprime crisis in the United States."
But he emphasised there was still underlying strength in the Australian economy.
"There is no doubt growth will slow," he said.
"There is no doubt the events in the United States have impacted upon business confidence and so on.
"That does produce flow-on effects here and the property sector will experience some flow-on effects."
Mr Swan said a new study by the International Monetary Fund (IMF) confirms Australia is well placed to weather the global economic downturn despite "a more uncertain than usual" outlook.
Australia's economic strength was the result of responsible economic management, the strength of banking and regulatory systems, and the fiscal position outlined in Labor's first budget, he said in a statement today.
"(The report) concludes that the sound macro-economic framework should permit Australia to weather the global downturn and contain inflationary pressures.
"The government has repeatedly said that while Australia is not immune from global economic turbulence, we are well placed to withstand the fall-out and today's IMF report is further evidence of that resilience."
The report noted that IMF directors welcomed the support that prudent fiscal policy was providing for monetary policy, Mr Swan said.
The IMF executive board considered Australia's banking system remained resilient, with stable profits, high capitalisation and few non-performing loans.
That was evident in stress tests undertaken by the IMF and presented in its report, showing Australian banks were able to absorb extreme shocks.
"The IMF considers that the outlook for the economy is more uncertain than usual due to large countervailing forces impacting on the economy with the commodity boom providing a substantial stimulus and the global downturn exerting a contractionary effect," Mr Swan said.
"IMF staff forecast that real GDP growth will moderate as required to bring underlying inflation back within the Reserve Bank of Australia's target range."
The IMF also welcomed the government's ambitious reform agenda, concluding that this should enhance the flexibility of the economy and lift productivity and labour force participation, Mr Swan said.
The IMF consults with Australian authorities, private sector economists and academia regularly to provide an independent and comprehensive assessment of economic performance.
AAP
- Forums
- ASX - General
- wayne swan: property set to crash
wayne swan: property set to crash
-
- There are more pages in this discussion • 5 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Featured News
The Watchlist
SS1
SUN SILVER LIMITED
Gerard O'Donovan, Executive Director
Gerard O'Donovan
Executive Director
SPONSORED BY The Market Online