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No economic disaster, but we are stuck in low gear

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06.09.2019

Prime Minister Scott Morrison's claim that this week's soft economic growth figures were "no surprise" is itself a bit, well, surprising.

If the government had such a strong inkling the Australian economy would endure a weak June quarter, why did it only really start softening up the public this week, in the days leading up to the national accounts?

Why didn't the April budget build more of this anticipated softness into its forecasts? And for that matter, if it was so well known that growth was trudging along at a sub-par pace of 1.4 per cent a year, why didn't the Reserve Bank of Australia foresee this weakness just last month?

For all the government's attempts to put a positive spin on the gross domestic product (GDP) figures this week — and there were plenty — it's hard to avoid the conclusion the numbers were weaker than the top economic officials had been predicting.

That's not intended to be an attack on their forecasting skills, nor is it a move to "talk down" the economy. It's an acknowledgement of facts.

To be clear, our economic position is not disastrous and it is also true we are heading into the 29th consecutive year of expansion. The economy is not shrinking, unlike how the United Kingdom, Germany and Singapore have been recently, as Morrison pointed out. But it is becoming more obvious that the picture of economic strength the government campaigned........

© The Age