RBA cuts to 3.25 & OECD gives Australia thumbs up
Wow, deep breath everyone. Australia can make it to the other side of chasm. Now, which companies will profit from the $42 billion Nation Building turbo boost? Thoughts anyone? I’ve got a few, but anyone else want to venture an opinion?
Australia will weather storm, says OECD
Australia will weather the global financial crisis, but should stop its stimulus strategies once its economy recovers, the Organisation for Economic Cooperation and Development (OECD) says.
Australia’s economic decline will be less than other OECD nations in 2009, thanks to sound financial market and economic fundamentals, it says.
OECD deputy secretary-general Aart de Geus, delivering a lecture in Sydney on Tuesday, said Australia’s budget surplus in November of 1.5 per cent of GDP allowed it to act quickly and deliver its initial $10.4 billion stimulus package.
This compared to an average budget deficit of 2.8 per cent for OECD countries.
Prime Minister Kevin Rudd delivered a second package on Tuesday with a record $42 billion in capital spending and cash handouts.
RBA slashes rates to 3.25pc
The Reserve Bank of Australia (RBA) has slashed its benchmark interest rate by 1 percentage point in its latest effort to prevent Australia’s economy from sliding into a recession.
The RBA reduced the official rate from 4.25 per cent to 3.25 per cent.It is the fifth consecutive cut and follows the 3 percentage points taken off the official rate in the final months of 2008.
In other stories this made me laugh
Mortgage rates are tumbling to their lowest level in decades after the RBA’s latest rate cut and the Government is moving to implement its $42 billion Nation Building and Jobs Plan as soon as possible.
But leading economists warn it will not be enough to stop the economy from sliding into a moderate recession.
They say the magnitude of today’s interest rate cut and the Government’s big spending package indicate the level of concern there is about the economy.
Did anyone seriously think Australia was going to avoid a recession? Surely not. I’ll be ecstatic if it is only a moderate recession.
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