The US and UK economic outlook is improving due to vaccination uptake and supportive fiscal measures and here in WA our economic growth is the best in the world. The mining sector is booming again and the housing market is going through the roof (pun intended) So are we out of the woods yet?
The federal support package did its job of stimulating growth and we are on track for a very strong 2021. Whilst some of the government stimulus is tapering off, we still have a very accommodating monetary policy courtesy of the Reserve Bank.
Interest rates are at record lows and likely to stay that way for some time (the Reserve Bank has stated they don’t anticipate any rate rises until 2024). So, for now some of the responsibility to build up Australia’s economic activity will be passed on to the private sector.
Next month will see the release of the Federal Budget and is likely to show a much-improved position from what was originally forecast – it will still be a big deficit but much less than forecast.
The focus will no doubt be on economic recovery and jobs. With a bag full of borrowed money the government didn’t spend before, expect it to be spent now! We’ll leave the speculation on where it will be spent to others but infrastructure will likely be a big one.
The economic outlook looks strong but it won’t be straight line recovery so best to expect a few bumps along the way. What does this mean for you?
Well, from an investor’s point of view, the answer remains the same; play the long-game. A good retirement planning specialist will have already invested in long-term Strategic Asset Allocations that are designed for your risk tolerance.
If this isn’t the case and you are concerned or confused about how the recovery and market conditions will affect your investments and retirement income, seek advice.
Call our specialists on 08 9445 2955 or click here to book a complimentary consultation.