Australian Economic Forecast

I love that phrase,

"I told you so!"

An article on the front page of today's Australian Financial Review said:

"The Australian economy is entering the final six months of 2009 with a momentum that seemed impossible just over two months ago."

On May 1, 2009 (Financial and Economic Crisis and Forecasts) I wrote:

"In July, 2008, the conventional wisdom in Australia was that inflation was a major concern, and forecasters argued for rising interest rates to curb inflationary tendencies and excessive economic growth. They were wrong! ...The threat to Australia's economy in July 2008 was deflation, not inflation...

The question now is when will it turn? Again, the forecasters have missed it. The upturn has already started, even though it is not evident in the data. The sharemarket has risen by 20% in recent weeks. The housing market in the United States has hit rock bottom, and will follow the upward trend in the sharemarket in the third quarter."

And here we are, the upswing in Australia has arrived.

"I told you so..."