Australia will endure a u-shaped recovery rather than a v-shaped recovery as many analysts had first predicted, according to the Melbourne Institute.
The Melbourne Institute’s latest Monthly Bulletin of Economic Trends said that while the rise in GDP over the June quarter was stronger than expected, a slow economic rebound was the most likely scenario for Australia over the coming months.
The report’s author, Dr Edda Claus, said the Institute is currently forecasting a quarterly GDP growth of around 0.5 per cent over the 2009/2010 financial year.
“The consolidation of the recovery in China and the strong turn-around in the Japanese economy, the two biggest importers of Australian raw materials, are particularly supportive of growth in resource-rich Queensland and Western Australia. This may mean a return of the two-track economy,” Ms Claus said.