ANZ warns economy to slow again in 2010

ANZ Banking Group Ltd has warned the Australian economy will slow in calendar 2010
before picking up later this year.
ANZ deputy chief executive Graham Hodges said recent retail trade and consumer
sentiment data has been encouraging but growth in housing would slow from its
recovery in late 2009.
While business confidence was high, growth in business investment and investment in
dwellings was likely to be flat during the first half of 2010, he said.
Mr Hodges was speaking to investors in a private briefing at Credit Suisse's 13th
Asian investment conference in Hong Kong.
He told them export demand and the federal government's stimulus packages had kept
Australia out of recession, according told slide notes lodged on Wednesday with the
Australian Securities Exchange.
ANZ forecasts Australia's gross domestic product would reach 2.7 per cent in 2010
and rise to 3.3 per cent in 2011, Mr Hodges said.
Australia's cash rate would rise towards 4.75 per cent by the end of 2010 and
plateau at 5.25 per cent in 2011 and 2012, he said.
Mr Hodges said a cash rate near the usual normal level - of between five and six per
cent - was unlikely before 2011 and economic growth was expected to remain at or
above trend.
Housing credit would grow at 8.1 per cent in 2010, but business credit would
contract by 3.2 per cent.
Mr Hodges' comments come one day after ANZ chief executive Mike Smith warned of
aftershocks and market volatility from the global financial crisis.
Mr Hodges told investors ANZ wanted its institutional bank to become the bank of
choice for the resources and infrastructure sectors in the region.
Commonwealth Bank of Australia chief executive Ralph Norris will speak at Credit
Suisse's conference on Thursday.