Invest
‘They don’t hurt that much’: Trade war unlikely wipe to growth
In good news for investors in international shares, one of the nation’s top economic forecasters believes the US versus China trade war’s implications for global growth have been overblown.

‘They don’t hurt that much’: Trade war unlikely wipe to growth
In good news for investors in international shares, one of the nation’s top economic forecasters believes the US versus China trade war’s implications for global growth have been overblown.

The latest Business Outlook from Deloitte Access Economics partner and economist Chris Richardson notes that despite worsening trade wars, global growth remains strong.
Mr Richardson said that although tariffs do hurt growth, “they don’t hurt it by all that much”. However, the forecaster believes US President Donald Trump’s assertion that “trade wars are good” is doubtful.
“The Donald says ‘trade wars are good, and easy to win’. We doubt that, though the impact of a trade war is likely to be far more muted than much media reporting would suggest,” Mr Richardson said.
“Setting aside all the noise, the backdrop for Australia’s balance of payments isn’t that bad. There will be some pressure on the current account deficit in the next few years as commodity prices soften and interest rates lift here and around the world, but the impact isn’t expected to be all that dramatic.”
The Deloitte Access Economic report noted that the geographic base of growth continues to narrow, growing more dependent on the US. Mr Richardson believes that this poses two problems.
“First, synchronised strength tends to be more durable, so the fading synchronicity of the moment is – by definition – riskier than had growth been more widespread. The base is narrowing because Europe and Japan have lost some momentum in their growth,” he said. “And while China’s growth remains magnificent, it too is slowing.”
The second problem is that the spurt in US growth is mostly due to the juice coming from the large business and personal tax cuts enacted in late 2017, Mr Richardson said.
“Those cuts are mostly a one-off prop to growth. The upshot is that, while global growth is excellent now and should remain above trend in 2019, it looks like heading back down the slippery slope come 2020,” he said.
Commenting on the domestic market, the economist noted that despite the house price fall we “had to have”, Australia’s growth has continued to accelerate, and ongoing strength is forecast to be good enough – at a “smidge” above trend both this year and next – to keep job gains solid and unemployment edging down.
“And, with inflation gradually on the rise, that mix should see the recovery in wages continue, albeit at snail’s pace. But that will be a Faustian bargain. Alongside a lift in wage growth there’ll be a matching lift in interest rates, with the latter acting as an anchor on consumer spending – and hence on the wider economy – in the next couple of years,” he said.
Mr Richardson is forecasting that although Australian economic growth will be solid, it won’t be quite as good as global growth, with the current drought adding to the short-term headwinds in play.

Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more

Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more

Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more

Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more

Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more

Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more

Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more

Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more

Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more

Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more

Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more

Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more

Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more

Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more

Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more

Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more