Australia’s economy can survive these share shocks for now, but further falls in stock prices could challenge the Coalition’s resistance to fiscal stimulus

The savage market ructions of recent weeks and days are disconcerting. While not unprecedented, the quite staggering fall in share markets and commodity prices are threatening to undermine the global economy. For Australia, the news is particularly alarming. Australia’s stock market, the ASX, has not performed well in recent years, lagging well behind the other markets. If the market ructions translate to an extended period of weak global growth, Australia’s already dismal export performance will be hampered and the commodity price weakness will further undermine national incomes.

We are not there yet. There needs to be either further falls in stocks and commodities or an extended period where market weakness persists for there to be material damage to the Australian economy.

Continue reading…
Source: The Guardian Circular Economy RSS