Aussie economy: RBA will not hike until mid-2019? - NAB

Analysts at NAB offered a snapshot of the economic picture in Australia.

Key Quotes:

"While Q1 2017 marked 26 years of growth in Australia without a technical recession, the pace slowed to 1.7% y/y, the lowest rate since 2009 and a continuation of the subpar growth trend since 2009. Our forecasts suggest this will continue. 

For now, we envisage lacklustre growth in household consumption, and a moderate cyclical upturn in non-mining investment, while government investment will help to fill some of the void left by mining investment. 

Real GDP growth will be supported in H2 2017 as LNG exports ramp up (with delays now suggesting the most strength in Q4), before softening to 2¼% y/y by second half of 2018 - as LNG peaks and dwelling construction turns negative. 

For 2019 growth improves moderately to nearer 2.7% y/y - as non-mining investment and public spending strengthen. While there is tentative evidence that macroprudential and policy changes are leading to a softening in dwelling price growth, which may help mitigate economic risks associated with rising household debt levels, the RBA is expected to keep rates on hold for a long period, with our forecasts only suggesting a hike by mid-2019."