Quarterly Economic Update October – Dec 2024
File: GW Market & Economic update - Oct – Dec 2024
Duration: 02:53
Date: February 12, 2024
00:01 GW Market & Economic update - Oct – Dec 2024
00:08 The final quarter of 2024 showed a mixed economic picture, with strong consumer spending and equity markets, but ongoing inflation, cost-of-living challenges, and a slowing housing market dampening optimism.
00:17 Interest Rates – Will They Rise or Fall?
00:23 Inflation in Australia eased in late 2024, with the trimmed mean rate falling to 3.2% in November.
00:30 The RBA kept the cash rate at 4.35% in December, aiming to bring inflation within target. The CPI rose 2.3% year-on-year in November.
00:38 Economists are divided on whether more rate hikes are needed in 2025, with some predicting a rate cut by February.
00:44 Cost of Living Pressures Continue
00:48 Total spending in Australia rose 1.5% in Q3 2024, down from 2.2% in 2023.
00:54 Essential spending fell due to lower petrol prices and energy relief programs, while discretionary spending increased by 0.8%.
01:02 Young Australians reduced spending by 2%, while those over 60 increased spending, with over-70s up by 7.7%.
01:08 Black Friday Means Big Spending
01:12 Australians spent around $7 billion during Black Friday and Cyber Monday in November, a 4% increase from 2023.
01:18 The growth was driven by strong demand for electronics, apparel, and household goods, with in-store shopping seeing a notable resurgence.
01:25 Is the Housing Market Finally Slowing?
01:30 Australia's housing market saw a slight dip, with home values dropping 0.1% in December, marking the first decline in nearly two years.
01:36 This decline is attributed to higher interest rates, limited borrowing capacity, and rising living costs, while the supply of new housing remains limited, worsening affordability issues.
01:43 Global Outlook for 2025
01:47 The global economy remains resilient despite risks, with growth expected to stabilize around 3% in 2025-2026, driven by emerging economies and gradual recovery in advanced ones.
01:55 Geopolitical tensions, inflation, and potential monetary tightening are key challenges.
02:01 For Australia, its economic outlook is influenced by ties with China and commodity exports, as China’s economy shows signs of stabilizing.
02:07 Trump’s Inauguration
02:11 The Trump administration's inauguration on January 20th has sparked speculation about its economic impact, particularly in trade policy, tax reforms, and geopolitical stability.
02:19 Early actions by the US President have included protectionist measures, such as higher tariffs on imports, which could create challenges for Australia's agriculture and mining sectors, given their reliance on US market access.
02:27 Stock Market Outlook
02:32 Australian equities finished the year positively, boosted by easing US inflation and global soft landing hopes. The ASX200 saw modest December gains, following global trends.
02:40 However, analysts warn of potential volatility in 2025 due to geopolitical risks, commodity price fluctuations, and uncertain monetary policies.