What will a Donald Trump presidency mean for the Australian economy?
What will Donald Trump’s presidency mean to the Australian housing market?
And, if he is re-elected, will he reverse the massive, years-long decline in house prices?
And what will be the implications for the global economy?
Read more: “I think it will probably be a pretty negative outcome for Australia, and we will see more and more of those kinds of impacts.”
The recent housing boom was a fluke, and a big one at that, but the broader economy is also struggling, said Dr Andrew McLeod, chief economist at Westpac.
“The fundamentals, in terms of the economy, are not as good as they would have been a few years ago,” he said.
If Mr Trump is reelected, it will likely be the first time since the global financial crisis that Australia has had a lower GDP growth rate than the United States, he said, pointing to the fall in US consumer spending.
The economy was also facing its worst year since the financial crisis, according to the Bureau of Statistics.
In recent months, the unemployment rate has fallen to 8.1 per cent, from 9.5 per cent a year earlier.
Australia’s jobless rate is the lowest it has been in a decade, although the unemployment figure is likely to be revised downward in coming months, with the Bureau expecting the rate to be around 8 per cent in 2019.
Mr Trump’s win has also brought about a significant boost to the economy in the form of exports, which grew 2.9 per cent last year, according a separate report released on Thursday.
Domestic demand was up 4.1 percent in the year to March 31, and the Government expects that to rise by another 2 per cent this year.
Economists say that despite Mr Trump’s popularity, he will not affect the global economic outlook as much as some other recent US presidents.
His election could also help boost Australian growth, because the country is currently the fourth largest importer of US goods.
But, Dr McLeod said it was unlikely that the economic slowdown would be as severe as some of the other recent events that have shaken the global markets.
A new economic reality?
“If Trump is elected, I think it is going to be a bit of a new reality,” he told AM.
He said the global recovery would be boosted by the economic reforms that he and the other economic experts have recommended, which include higher wages, tax cuts and a more liberal labour market.
Dr McLeod says the global market for Australian-made goods was already strong.
It was just that many Australian businesses were not exporting much to the US and so the global demand for Australian goods was not as strong.
“There are some big markets that are now getting a lot of those products, and so those two things are going to really boost the domestic demand for goods in Australia,” he added.
That will be especially important in the long term, because Australia has not been able to keep up with the international demand.
And, while the global slowdown has had an impact on the Australian dollar, Dr MacLeod said that would probably not be an issue in the near future.
Despite the impact on Australian economic growth, it is important to note that Australia’s real interest rate has risen since the election, according the Reserve Bank.
We expect the inflation rate to rise slightly in the coming months.
Read more about the election: A stronger economy would also have been welcome news for Mr Trump, but he would also be likely to have had to address the problems of the US economy in other ways.
First, he would have to renegotiate trade deals with other countries.
This would be a difficult task, since many of the trade deals were signed before he became president.
Second, he may have to make good on promises to the world that he made during his election campaign, including the promise to pull the US out of the Trans Pacific Partnership.
Third, he might have to consider whether to continue to pursue a trade war with China.
Fourth, he could have to find a way to bring back jobs to the United Kingdom and to address his concerns about immigration.
Finally, he should make a big push to bring the US into the Transatlantic Trade and Investment Partnership (TTIP), a multilateral trade deal between the US, the European Union and other countries that have been negotiated by Mr Trump.
For Dr McLean, the biggest risk to the global order was not the election of Mr Trump but the prospect of a Trump presidency.
Instead, he thinks the world will be more stable, with fewer economic shocks.
Topics:economics-and-finance,economics,world-politics,political-parties,worldwar-2,government-and,worlds-first,united-statesFirst posted September 03, 2019 12:39:57Contact Matt JonesMore stories from New South Wales