First the U.S., then the U.K.; Now the International spot light is on Australia :
Gabriel Stein, from Lombard Street Research, said Australia could prove vulnerable once the global commodity cycle turns down. It has racked up a current account deficit of 6.2pc of GDP despite enjoying a coal, wheat, and metals boom, effectively spending its resources bonanza in advance. Household debt has reached 177pc of GDP, almost a world record.
“It is amazing that in the midst of the biggest commodity boom ever seen they have still been unable to get a current account surplus. They have been living beyond their means for 10 years. What worries me is that productivity growth has been very low: they have coasting after their reforms in the 1990s,” he said.
“The easy money went straight into real estate,” said Hans Redeker, currency chief at BNP Paribas.
» Australia faces worse crisis than America – The Daily Telegraph, 29th July 2008.