Economic Update

Date: 01/02/2011

The devastating Queensland floods will have some impact on economic activity and inflation, but overall the picture for business in 2011 is bright.

The Queensland floods come as an unwelcome shock as Australia settles down to business after the holiday season, and economist Professor Neville Norman says there will be adverse effects on economic activity and inflation as a result. But, he says, by international comparisons, Australia is in a strong position and poised to do well in 2011. Globally, China remains a powerhouse and the European debt nations continue to drag down business and consumer sentiment. Professor Norman expects the Australian growth rate to remain around three percent, exchange rates to stay volatile and interest rates to continue to rise.