The results of the Canberra Times mini-survey are in, and you can read them by clicking on the attached graphic.
Here's today's report:
The ACT will survive its present downturn, returning to economic strength in the year ahead, according to a survey of eight leading forecasters conducted by the Canberra Times.
But they expect the Australian economy as a whole to slow and both ACT and national unemployment to rise.
Three of the eight economists surveyed expect interest rates to climb further in the coming financial year.
At present the ACT is technically on the edge of a “demand recession” according to figures released by the Australian Bureau of Statistics earlier this month...
Its State Final Demand (a measure of spending and investment) went backwards in the March Quarter - sliding 0.3 per cent in contrast to every other state and territory in which demand advanced.
A second consecutive slide in demand would put the ACT into what is known as a demand recession.
In the year to March the ACT economy scarcely grew at all according to the Bureau of Statistics, with state final demand climbing a mere 0.05 per cent. By contrast national demand soared 4.8 per cent.
But in the coming financial year the forecasters expect ACT final demand to bounce back, surging ahead 2.2 per cent.
ACT demand growth would still be lower than the expected national average of 3.0 per cent, but would be well away from the edge of recession.
The forecasters expect Australia’s overall rate of economic growth to slow from its present 3.6 per cent to 2.6 per cent by July 2009.
The most pessimistic forecasters, the ANZ bank and TD Securities, expect the Australian economy to grow by only 2 per cent. The most optimistic forecaster, BIS Shrapnel, expects it to maintain its current momentum at 3.4 per cent.
Every forecaster surveyed expects a modest jump in Australia’s unemployment rate, from its present 4.3 per cent to around 4.8 per cent. Only one, TD Securities, expects Australia’s unemployment rate to climb above 5 per cent.
Both of the forecasters that attempted to predict the ACT’s unemployment rate expect it to climb from its present 2.7 per cent; one expecting 3 per cent, the other 3.5 per cent - rates that would still be better than the national average.
The ANZ Bank is expecting a sharp lift up in official interest rates, predicting two further rate hikes from the Reserve Bank that would lift the cash rate from 7.25 per cent to 7.75 per cent. It expects both of those hikes to take place before the end of the calendar year.
Commonwealth Securities and BIS Shrapnel expect just one interest rate hike of 0.25 per cent, also before the end of this calendar year.
Four forecasters expect interest rates to remain steady. Only one, TD Securities, is expecting lower interest rates.
The firm’s Joshua Williamson says he expects the Reserve Bank to cut interest rates twice - once during the current calendar year, and once during the first half of next yeasr, bringing down professional interest rates by a total 0.50 per cent. But he says he doesn’t expect all of the cut to be passed on by mortgage lenders, who he says are likely to cut their rates by 0.4 per cent.
All of the forecasters expect some moderation in Australia’s underlying rate of inflation, at present at a long-term high of 4.3 per cent.
However only one, BT Securities, expects it to move back to top of the Reserve Bank’s 2 to 3 per cent comfort zone by the end of the financial year.
Most expect the Australian dollar to fall back from its present long-term high of 96 US cents. Only one Westpac expected it to climb further, reaching 99 US cents by mid-2009.