Posted June 09, 2018 18:29:10 James Cogan is one of many economists who are predicting Australia’s economy is on the brink of a crisis.
Key points:Mr Cogan says there are signs of a slowdown in the mining industry and that the Reserve Bank is on track to tighten interest ratesThis is the latest in a string of warnings that the economy is in the midst of a serious slowdownMr Corgans warning comes just weeks after he warned of a “recession” for Australia’s mining industry.
“Australia’s economy has been at the brink for a while now.”
It’s a really big problem for the Reserve, for the Federal Government and for the Labor Party,” he told Sky News.”
So the economy’s now at the very brink of the next recession, and it’s just a matter of time before the next downturn occurs.
“The Reserve is doing its homework.
It’s going to be tightening rates later this year.
And then, hopefully, in a couple of years, the Government will be back to normal again.”
Mr Coggans warning follows warnings that Australia’s manufacturing industry will be hit hard by tighter lending rules, with the Federal Treasury now forecasting the cost of borrowing will rise by more than $500 million a year.
“That will really hit the mining and construction sectors,” he said.
“They’re already being hit.”
In a separate interview with ABC News, Mr Cogan said the Federal Reserve was likely to tighten the rate next year, and warned the Federal government’s approach to mining was a “risky gamble”.
“If you have a policy where you’re trying to keep interest rates low, then the risk is that the market will take a big hit,” he warned.
“If interest rates are too low, there is an effect on people’s ability to borrow.”
Topics:business-economics-and-finance,government-and/or-politics,mining-industry,industry-economy,jobs,australiaFirst posted June 08, 2018 17:35:54