Last week’s Australian Q1 GDP surprised many with its strength, but not Klaus Baader from SocGen, who got the number spot on.
Business Insider wondered what had driven Baader’s bullishness about the data and what he thought about the economy going forward.
He told us that he had revised his forecast higher “from 3.3 to 3.5 after the ABS published the BoP and IIP data including the net trade contribution (at 1.4pp stronger than my 0.9 forecast, as well as the inventory figures (weaker than I thought).”
The Balance of Payments and the International Investment Position data were released last Tuesday – the day before the GDP figure.
Many observers have dismissed the data as historic. But Baader adds:
I am arguably less pessimistic about the Oz economy than many. I think the Great Pivot (away from mining investment towards consumption, non-mining investment (esp housing), exports) can and appears to be working.
Good news and a great antidote for the crash in consumer confidence since the Budget.
Also: nice call.