GOOD NEWS STORIES - MAY 2009

29/05/2009

IMF predicts Australian economy to outperform the best and biggest in the world
In a recent analysis from the International Monetary Fund, Australia is forecast to perform best out of the world's 12 largest developed economies.  Australian economy will see recovery three times faster than the UK and four times the speed of Japan.  Furthermore our unemployment is expected to reach 6.8 per cent this year which is some 2 per cent lower than Germany, France, Italy and the US.  "Australia is certainly doing much better than other developed nations" said JB Were chief economist Tim Toohey.  Australia remains one of the few countries left in the world with capacity to cut interest rates if the economy requires further stimulation. 
 

Rudd's stimulus package goes according to plan

Retail sales jumped 2.2% as shoppers spent $19.3 billion in March.  "It's a big shock in retail sales, it was a lot stronger than a 0.5% increase" JP Morgan economist Helen Kevans said. "In anticipation of the cash handouts that were to be received in April and May consumers went out and spent a lot on discretionary items."  Clothing and soft goods sales jumped 6.4% while department stores sales climbed 13.2% in March.  "These are fantastic results. Looking through the volatile monthly retail sales, they are holding up quite nicely" said ICAP economist Adam Carr. 
 
 

RBA prepares for turning point to recovery signaling smaller rate cuts

The Reserve Bank of Australia said any future interest rate cuts may be smaller and less frequent, ahead of an expected recovery.  In its quarterly statement on monetary policy, it said "With interest rates at historically low levels, and some signs of stabilisation in the world economy, the board has recently viewed it as appropriate to make small and less frequent adjustments to the cash rate than was the case up until February when conditions were deteriorating rapidly".  Although the RBA still sees GDP contracting by 1.25% in the June quarter and by 1% over 2009 it said that business confidence is improving with increased consumer spending in recent months with rate cuts and fiscal stimulus package.


A super month for Super Funds
Members of super funds clawed back some of the losses inflicted in the wake of the global financial crisis reporting return of 3.4 per cent for April, the best single monthly return in more than 11 years according to interim figures from research agency Chant West.  Data from Chant West shows, however, for the ten months to the end of April, returns are down 14.8 percent.  "There's definitely some investor optimism out there in the share markets, but we think it's too early to tell if it's a turning point or only temporary relief from gloom over the past year and a half," said Chant West investment research analyst Mano Mohankumar.  Chant West further indicated that industry funds have gained only 2.9 per cent in April which is a significant underperformance compared to other types of funds. Chant West said in the financial year to date, industry funds lost 12.4 per cent of their value.