The Australian Bureau of Statistics has released economic data that covers the effects of the global financial crisis on Australia and the minerals industry.
A drop of 0.3% in the consumer price index slashed the annual inflation rate to 3.7% from 5.0% in the 2 months to September, according to the Australian Bureau of statistics.
Federal Treasurer Wayne Swan said inflation will continue to ease over the next six to 12 months as the full effect of weaker world economic conditions flows through.
“We domestically are seeing the unwinding of the mining boom. And as that occurs, the UK, the US, Japan and the eurozone countries are all in recession,” Swan said.
According to Swan, the Government has had to shift its focus from fighting inflation to supporting growth and jobs.
ABARE senior commodity analyst Alan Copeland told MINING DAILY that the future does not look as grim as the present situation suggests.
“Economic activity and hence mineral demand is expected to start to recover by the end of 2009,” Copeland said.
“Governments around the world, including in the US, EU, China and Australia have put together economic stimulus packages. Over time this fiscal stimulus is expected to positively impact on mineral demand, however at this stage it is too early to say when this may be or how large the effect will be.”
ABARE’s medium term forecast, published in the March Australian Commodities, will be released on 3 March 2009.