Treasury Says Recession May Be Over
September 25th, 2009
In a piece of huge positive news, Treasury says the recession may be over and unemployment is not likely to reach previously expected heights. Its prediction is based on the international recovery, positive migration figures, rising business and consumer confidence and an improving housing market.
Treasury expects the June quarter to be “the last quarter of contraction,” and is predicting a small amount of growth in the current quarter, which ends this month. It says “signs of growth in the economy mean it is likely that activity levels and labour demand will exceed those in the Budget forecasts. This is likely to result in a lower peak in the unemployment rate - perhaps around 7.5% next year, compared with a peak of 8% in the Budget forecasts.”
But as always with an optimistic forecast there’s warning - Treasury has echoed concerns the quality of the current recovery - in which housing is playing a big role - is questionable, saying the stronger growth may prove to be unsustainable.
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