THE Aussie dollar would hit US70c, the stock market would rise to 5800 and interest rates would be cut again in May.
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All predictions from leading economic forecaster Dr Chris Caton when he addressed Cleveland Rotary Club on Thursday.
Fill up with petrol now, was another piece of advice he doled out claiming the oil price was poised to rise 80 per cent before year’s end.
There was still downward pressure on the Aussie dollar and he expected it to bottom out at US70c by December.
A February cut to interest rates was not planned as a “one-off” and Dr Caton expected rates to be cut by a quarter of a percent in May.
That would depend on unemployment and investor behaviour in the residential property market, he said.
“Once it is clear that the unemployment rate has peaked, interest rates will go up again – but that will probably be in 2016.”
Low interest rates had also had an effect on the price-earnings ratio for the Australia market, which was above its long-term average.
He said on January 1, he predicted there would be an 8 per cent market rise by December, and forecast the ASX 200 would end the year at 5800.
Even though the market hit his target in the first six weeks of the year, Dr Caton said he was sticking to his initial prediction that the ASX 200 would finish the year at 5800, despite running hot at 5905 on Thursday.
Education and medical sectors were generating the most jobs but there had been a 15 per cent leap in construction jobs over the past year.
Residential property growth in Brisbane, fuelled by investors, boosted the median Brisbane property price 7.5 times more than what it was in 1987.
Overall, he expected about 3 per cent growth in the economy this year and said Australia was at the top of the list of the best countries to live in and work in.