Economic predictions for 2014 - pick a box!
While our leading economists will be afforded the opportunity to change their predictions as the new year rolls on, here is their first attempt:
5 economists from AMP, Commsec, NAB, ANZ and UBS put on their beads and adorned themselves with scarves whilst burning incense and gave us their predictions for the coming short term cycle.
All five economists predict unemployment (currently 5.8%) will rise in the next 3 months, albeit one predicts it will fall to 5.6% over the 12 months.
All five predict the cash rate will remain unchanged over the first quarter. Over the 12 months, two predict it will remain unchanged, two that it will increase to 3.0% and one that it will fall to 2.25%.
Three predict the $AUS will remain virtually unchanged over the quarter while two believe it will weaken. Over the 12 months, while one has predicted it will strengthen to US90c, four have predicted it will weaken as hoped by the RBA.
The average of the 12 month predictions are:
Unemployment to rise from 5.8% to 6.02%.
Cash rate to rise from 2.5% to 2.65%.
$A to weaken from 88.7c to 86.9c.
Summary: At this early stage - interest rates are unlikely to move much at all during the year and unemployment is expected to remain relatively in check, aided by a slightly weaker $A.
The overall impact of these early predictions is for 2014 to deliver another year of growth in both housing prices.