Commodity prices, as tracked by the Reuters-Jefferies CRB Index, fell sharply in September. Falling commodity prices, most notably crude oil prices, moderated inflationary fears and underpinned the return of fixed interest markets as yields fell. Australia's economy grew in the second quarter at the slowest pace in three years. GDP rose by only 0.3% from the first quarter (consensus: 0.6%). Growth is not evenly distributed, with Western Australia forecast to grow this year at 14%, faster than China. The IMF raised the 2006 ‘World Economic Growth Forecast' to 5.1% (April: 4.9%) based on a stronger than expected contribution from emerging economies such as China. The IMF estimated that the US will grow at 3.4% this year, with Europe's growth more subdued at 2.4%. While global economic growth is expected to remain robust the IMF cut the Australian GDP forecast (+3.1%, previous: +3.3%) as inflationary pressures increased. While slowing, the Australian economy is in its 15th consecutive year of economic expansion, by far the longest in a century.
19th-October-2006 | 
