WORLD BANK FORECASTS: Australia To Grow Below Trend

Getty/Paula Bronstein

Australia is likely to grow below trend as the mining boom passes its peak, according to new forecasts by the World Bank.

GDP in Australia hit a peak of 3.5% in the March quarter this year but is expected to fall to a bit over 2% by the end of March next year.

The World Bank assessment is similar to recent statements by the Reserve Bank of Australia (RBA).

The RBA says GDP growth is expected to be a little below trend over 2014/15 before picking up next financial year.

The World Bank says global growth is expected to rise modestly in the second half of 2014, reaching 2.6% in 2014 and an average 3.3% in 2015–17.

In the United States, growth is projected at 2% in 2014, rising to about 3% in 2015.

Better employment prospects will support real income growth and confidence, investment will rise in line with strong profit and favourable financing conditions, and fiscal consolidation will ease.

In the Europe, growth is expected to resume in the second half of 2014, reaching about 1% for the year as a whole.

In Japan, growth is projected at about 1% in 2014, down from 1.5% in 2013.

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