| Australian economists say investments prolonged over uncertainty |
| Date: 2010/8/27 Click: 1886 |
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Global uncertainty and concern over a proposed domestic mining tax caused Australian businesses to hold-up investments in the June quarter, Australian economists said on Thursday.
"The uncertainty on the global front has seen businesses effectively prolong investment plans," said economist Savanth Sebastian from CommSec, the Australian leading investment company.
According to the Australian Bureau of Statistics, new private capital expenditure dropped 4 percent in real terms, seasonally adjusted, in the June quarter.
The median market forecast was for a rise of 2.3 percent in the June quarter.
Sebastian said the lower than expected figure was probably a reflection on the mining tax, which the federal coalition does not support.
"Certainly that has had an impact on the result and added to that there were concerns over the June quarter slow down in the economy, not just domestically, but on global front," he said.
He also said while companies hadn't scrapped their business plans, they had just delayed the start date.
The figures released on Thursday gave the central bank no impetus to raise interest rates in the short term, he said.
"Domestically the economy is certainly showing signs of slowing down or stalling, and that effectively means that the Reserve Bank is unlikely to raise rates in this environment," he said. |
