ANALYSIS - IS AUSTRALIA HEADED FOR A RECESSION?

Publication: AsiaPulse News

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COPYRIGHT 2005 Asia Pulse Pty Ltd

SYDNEY, Oct 31 Asia Pulse - Low inflation, low interest rates, surging share prices, a strong currency and jobs aplenty: a sublime combination, but no guarantee that the good times will continue much longer.

During commodity price booms all seems well with Australia's economy.

Soaring commodity prices boost the profits of resource firms. Eager investors push share prices higher.

Foreign capital and export revenue push the Australian dollar up, reducing import prices, keeping the trade deficit in check and suppressing inflation.

With inflation low, the Reserve Bank of Australia (RBA) can hold...

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