RBA's Malcolm Edey confident in China, India growth
Allison Jackson February 18, 2009 The Australian
CHINA and India would continue to grow at a fast pace for a "long time", boosting demand for Australian raw materials.Reserve Bank assistant governor of economics Malcolm Edey said today China and India had “long way to go” before they caught up to industrialised countries. “China and India … until the recent crisis were growing at extremely high rates. They have got plenty of scope to do that for a long time,” Mr Edey told a business forum in Sydney. Mr Edey said demand for Australian resources would continue to grow “which is going to be very good for Australian incomes”, and would help offset the impact of an aging population on economic growth. “China and India and other parts of the developing world have a long way to go to catch up and as they catch up they are becoming a bigger and bigger part of the world and that’s a very powerful influence in increasing global growth prospects,” he said. “I think that force will continue to operate in the long run, but we are seeing very severe short-term effects from the global financial crisis working against that at the moment.” China ranks as Australia’s biggest trading partner, while India’s importance has grown in recent years. India is now Australia’s 11th biggest trading partner, according to the Department of Foreign Affairs and Trade website. Mr Edey reiterated the Reserve Bank’s view that Australia would continue to outperform other industrialised nations “in the difficult period that lies ahead” due to the strength of the domestic financial system. Mr Edey provided no clues on the RBA’s attitude towards interest rates since its last board meeting on February 3. At the meeting, the RBA board cut interest rates by another 100 basis points, taking rates to a 45-year low, and signalled it was near the end of the easing cycle. But since then the economic situation has deteriorated even further, with Japan, Australia’s biggest export market, experiencing the worst economic conditions since World War II and Australia’s unemployment rate at the highest level since June 2006 while business and consumer confidence are in the doldrums. Market participants are hoping RBA governor Glenn Stevens will provide some clarification on the central bank’s strategy when he testifies before federal parliament on Friday.
It offers some Australians a little hope when we hear continued talk about increasing demand for Australian exports underpining better economic conditions than other parts of the globe, however, which sectors will most benefit from this continued demand?
On a slightly different tangent: is it reasonable to expect the RBA to continue adjusting rates, or should they be a little cautious and 'wait and see' the effects on the recent and significant movements?
Tuesday, February 17, 2009
Jobs not secure in Australia...?
General Motors to slash 47,000 jobs
Jacob Saulwick,February 18, 2009 - 2:37PM Sydney Morning Herald
The parent company of Australian car maker General Motors Holden will slash 47,000 jobs worldwide in the coming year, but it remains unclear how many local positions are under threat.
General Motors will lay off 26,000 workers outside the US as part of a plan to remake the company in exchange for massive financial aid, according to a document lodged this morning with the US Treasury.
But the carmaker says it expects Holden to remain viable, in part because of assistance extended by the Australian Government.
Holden's plans for a new, more fuel-efficient car, financed with government help, should ensure that Holden remains a profitable arm of GM worldwide, the company said.
Holden is not ruling out cutting local staff.
"We are scrutinising all aspects of the business and will be making some decisions - some of them tough decisions - in the coming weeks in terms of our structure and operations,'' a spokesman said.
"All of this contributes to the ultimate goal of being a viable, sustainable local operation,'' the spokesman said.
The survival of the global carmaker is far from certain.
GM has lodged restructuring plans with the US Treasury as a condition of a temporary multi-billion dollar survival loan.
With sales plummetting, GM could need a $US30 billion crutch from the US Government by 2011, the Treasury filing asserted.
The company is also asking for help from the governments of Canada, Germany, the UK, Sweden and Thailand.
Some worrying news for workers in Australia's automotive production industry, although there seems some hope as our Government continues to support Holden in its efforts to produce. Are you aware of other instances through our recent economic history where the Australian Government has stepped in to 'prop up' car companies producing in Australia?
Jacob Saulwick,February 18, 2009 - 2:37PM Sydney Morning Herald
The parent company of Australian car maker General Motors Holden will slash 47,000 jobs worldwide in the coming year, but it remains unclear how many local positions are under threat.
General Motors will lay off 26,000 workers outside the US as part of a plan to remake the company in exchange for massive financial aid, according to a document lodged this morning with the US Treasury.
But the carmaker says it expects Holden to remain viable, in part because of assistance extended by the Australian Government.
Holden's plans for a new, more fuel-efficient car, financed with government help, should ensure that Holden remains a profitable arm of GM worldwide, the company said.
Holden is not ruling out cutting local staff.
"We are scrutinising all aspects of the business and will be making some decisions - some of them tough decisions - in the coming weeks in terms of our structure and operations,'' a spokesman said.
"All of this contributes to the ultimate goal of being a viable, sustainable local operation,'' the spokesman said.
The survival of the global carmaker is far from certain.
GM has lodged restructuring plans with the US Treasury as a condition of a temporary multi-billion dollar survival loan.
With sales plummetting, GM could need a $US30 billion crutch from the US Government by 2011, the Treasury filing asserted.
The company is also asking for help from the governments of Canada, Germany, the UK, Sweden and Thailand.
Some worrying news for workers in Australia's automotive production industry, although there seems some hope as our Government continues to support Holden in its efforts to produce. Are you aware of other instances through our recent economic history where the Australian Government has stepped in to 'prop up' car companies producing in Australia?
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