You might want to read this article with an adult beverage by your side.
Goldman Sachs has released a rather bearish take on the domestic economy over the course of 2014 in a 50-page outlook for 2014 under the title “Australia, the odd one out”.
At the heart of the forecast for just 2.3% growth is the fact that the mining cliff will be steeper than the market and the budget forecasts now expect, and as a consequence employment will be more subdued than expected, household incomes more restrained, government spending pared back further and even buoyant house prices won’t be able to assuage Australian household saving patterns given all of the above.
Even with all of the above Goldman Sachs still think that the risks are to the downside for growth in 2014.
The report says stocks will still rally thanks to a lower currency and the lift in global markets, but this is one of the most bearish outlooks we’ve seen on the economy for some time and its worth taking a deep dive into some of the charts.