The Australian Economy in 2016-17: Looking Beyond the Apartment Construction Boom

Abstract

The transition in the sources of growth away from the mining sector continued in 2015–2016. However, this transition was narrowly focused, primarily occurring in residential investment and nonresource exports. Nominal non-mining private business investment grew only moderately. Inflation was weak during 2015–2016. This reflected low global energy prices, together with subdued domestic final demand and wages growth, despite some improvements in the labour market. This lowinflation environment was a factor contributing to monetary policy being eased once during 2015–16 and again subsequently. The cash rate reached 1.5 per cent, a new low for the inflation-targeting period. Alternatively, fisca..