A strong Australian dollar is good news for travellers and our import industry but some experts are warning it’s also a sign we could be heading for another recession.
Meanwhile Australia has been told that it should strengthen trade ties with the European Union.
Sacha Passi reports.
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A conference in Brisbane today was told Australians tend to look at trade in Europe with the individual countries.
But Australia needs to refocus on the EU as a whole if we’re to make the most of trade opportunities.
David Daly, European Union Ambassador: “European Union accounts for thirty five per cent of all the foreign investment in this country.”
That helps support one point two million Australian jobs but there’s a potential for more.
David Daly, European Union Ambassador: “The European Union is a large economic block with half a billion people, a developed economy, strong purchasing power.”
But a strong Australian dollar means our export industry will slow although it’s good the import industry.
Economic experts aren’t ruling out the possibility of another recession. They say if Australia continues off shore borrowing our economy will struggle.
Economists say Australia also has a mounting deficit problem with its offshore traders.
Mark McGovern, Economic Lecturer QUT: “Australians are producing around a trillion dollars worth of product every year but they’re spending a trillion and fifty-million.”
He says unless we maintain our export industry the deficit will continue to grow.
Mark McGovern, Economic Lecturer QUT: “Against the US dollar we’ve had a very quick retraction and a rise of over thirty percent in one year this is not a good sign.”
Mr Daly doesn’t believe Australia’s facing a recession.
David Daly, European Union Ambassador: “In developed countries, we would need to have a negative growth of around three percent per annum over the next period and we’re not going to have that.”
The Australia dollar is still at its highest compared to the US dollar in almost three decades and shows little sign of falling.
Sacha Passi, QUT News.