Gerard Minack stating the obvious with his usual savoir-faire.
Australia returns to mediocre growth
Australia is recovering from a year when policy tightening snuffed out private sector growth. The recovery will likely be uneven reflecting still-tight monetary policy. Trend per capita growth will remain mediocre because low investment and high population growth unsurprisingly lead to weak productivity growth. Rate markets are underestimating how far the RBA will ultimately ease policy. Domestic equities look unattractively expensive given low expected EPS growth.
