The Deloitte Access Economic report is a good example of the dismal science.
"Deloitte Access Economics is forecasting a "more promising" outlook for the second half of 2024 as cost of living pressures are expected to subside, but has highlighted the housing crisis as a "significant worry" while population growth outpaces dwelling completions.The latest Deloitte Access Economics Business Outlook forecasts real gross domestic product (GDP) growth of 1.7 per cent in 2024-25, although for the calendar year it will sit at just 1.3 per cent."Outside of the pandemic, that would be the weakest growth since the early 1990s recession," the report states."Cost of living pressures continue to crush household consumption, which grew by just 0.1 per cent in the final quarter of 2023."And even that level of growth was only made possible by Australia’s surging population. In per capita terms, household consumption fell 2.3 per cent over the year to December 2023."So why is the outlook more promising? The report authors point to the impacts of moderating inflation and expected interest rate cuts."Meanwhile, changes to the Stage 3 tax cuts and real wage growth will lift household budgets, paving the road for a recovery in consumer spending," the report states."Looking beyond 2024, investment in Australia’s energy transition is expected to boost construction activity and lift exports in the long run, underpinning a longer term growth strategy for the Australian economy."However, Deloitte Access Economics partner and report lead author Stephen Smith says the outlook for growth is clouded by fading business investment, a housing construction sector spinning its wheels, and a global environment that is uncertain at best."The case for lower interest rates is growing, but there is significant debate about the timing and extent of rate cuts. Our forecasts now include a first rate cut in November this year, based on an acknowledgement that a cautious RBA will likely want to see the September quarter inflation data, released in late October, before pulling the trigger," he says."
