Australian economy will be on a growth track for another two years

Australian economy will be on a growth track for another two years	Australia is forecast to have at least another two years of solid economic growth, extending a quarter of a century without recession and dodging the deflation, Reuters reported on Sunday.

The latest Reuters poll found analysts expect Australia's A$1.6 trillion ($1.2 trillion) of gross domestic product (GDP) to expand by 2.9 percent this year, unchanged from the July poll.

Growth was seen at 2.8 percent next year and 2.9 percent in 2018, a result that would see Australia capture the Netherlands' crown for the longest run without a recession.

Surging export volumes, record low interest rates and an historic boom in home building have already underpinned growth of 3.3 percent in the year to June.

A recent revival in the value of commodity exports also promises to boost company profits, national income and tax receipts in coming months. Surging prices for coal alone could eradicate the country's trade deficit and add 2 percentage points to nominal GDP.

The worst also seems to be over for a long slump in mining investment, which subtracted a huge 1.6 percentage points from GDP growth in the year to June.

At home, jobs growth has turned sluggish and heavily weighted to part time work, restraining wage growth and adding to downward pressure on inflation.

Indeed, underlying inflation slowed to a record low of 1.5 percent in the year to June and looks likely to have remained very subdued in the third quarter.

Analysts forecast consumer price inflation would run at just 1.2 percent for 2016 as whole, well under the RBA's target of 2 to 3 percent.

Yet they also expected it to pick up to 2.1 percent next year and 2.4 percent for 2018, a welcome outcome that would eliminate the need for more rate cuts.
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