Australia: Economy at risk from trade war - ANZ
According to analysts at ANZ, as the global economic backdrop has deteriorated this year with faltering of US-China trade negotiations and with a resolution seems less likely, Australian economy is particularly at risk from heightened global uncertainty and a slowdown in China from a prolonged trade war given its exposure to China through trade.
“In the event that there is a slowdown in global and Chinese growth, the Australian economy will be affected through several transmission mechanisms. Rather than trying to quantify a very uncertain outcome, we consider those mechanisms here.”
“The two main channels will be: a direct impact on GDP through the terms of trade, with implications for the fiscal position a key issue; and a second round effect through business sentiment.”
“We think that, if there is a sharp slowdown in China, the Australian Government will need to forgo its forecast budget surplus in order to proactively support the economy.”
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.