Australia's Population Growth to Slow, Easing Pressure on Rates, BIS Says
A slowdown in Australia’s population growth, as long-term visitors leaving outnumber those arriving, could ease pressure on rental markets and lead to a “relatively benign interest rate environment,” BIS Shrapnel Senior Economist Jason Anderson said.
Population growth will slow to about 1.5 percent in the 2011 fiscal year and to 1.3 percent in 2012, on the exit of visitors holding student and business visas of about four years, Sydney-based Anderson said in an e-mailed statement. Those visa holders arrived over the past three years, he said.
“Overall, a few years of weakening population growth will have some mixed effects on the economy,” Anderson said. “It will lead to more moderate growth in household spending, at a time when the income gains from the commodity cycle will already be boosting national income.”
The nation’s population increased 2.1 percent in the year to September 2009, the fastest expansion since the mid-1960s and three quarters of a percentage point quicker than the average for the past 20 years, according to the Reserve Bank of Australia.
Net migration jumped 34 percent from a year earlier, statistics bureau data show, as a labor shortage and low unemployment pushed up the number of people coming on long-term visitor visas.
Moderate employment growth as population growth slows will result in fewer inflationary pressures and only two rate increases in 2011, Anderson said.