NEWSFLASH! In September I will join The Conversation as its Business and Economy Editor. I have been honoured to work at The Age for the past ten years, originally alongside the legendry Tim Colebatch, and for the past four years as economics editor in my own right.

At The Conversation, my job will be to make the best thinking from Australia's 40 univerisites accessible to the widest possible audience. That means you. From the new year I will also write a weekly column.

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I'll continue to post great things from The Conversation and other places here, and also on Twitter and Facebook. Enjoy.

Thursday, June 10, 2010

A "V-shaped" economic recovery?

So far, here.

When Governor Stephens speaks of a "V" shaped recovery, he is correct - so far. Australia recorded just one quarter of negative growth during the economic crisis. On the graph it is a deep V. But there's no guarantee it will stay that shape.

In the March quarter economic growth was positive - we were at the top-right tip of the V. But the unsettling truth is that were it not for an extraordinary 11.6 per cent jump in government stimulus construction spending that quarter growth would have been negative. We would have been looking at a W.

And although not many are game to say it out loud, it gets worse. Stimulus programs are finishing. Treasury says it will subtract one percentage point from economic growth this year. And the troubles overseas are just beginning to touch our shores.

We are at the top of a V, for now.

Published in today's SMH

Related Posts

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. Mining export earnings are beginning to roll (whatever the industry says)

. We're back, so spending's capped. Let's hope we really are.

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