Bank chief sees more confidence
Consumer and business confidence in Australia should rebound in 2013 if the global economy stays relatively stable, says Commonwealth Bank chief executive Ian Narev.
Mr Narev said that since August 2012, developments in major areas of concern in the global economy - European Union stability, US recovery and China's ongoing growth - had been positive overall.
This had generated a period of relative stability, which had had a positive effect on global equity and debt markets.
There are still reasons to be cautious, such as the lack of a sustainable long-term plan to resolve sovereign debt in Europe, the fragility of the US economic recovery and uncertainty over the long-term effects of strategies employed by central banks overseas.
"However, if the current stability continues, we believe it will translate into a slow but steady rebuilding of consumer and business confidence in Australia, and that is our base case for the 2013 calendar year," Mr Narev and Commonwealth Bank chairman David Turner said in a newsletter to shareholders on Friday.
The bank's stockbroking arm, Commonwealth Securities, said 2013 should be a normal and less volatile year.
"The problems have not all been solved, but there is a greater determination by policymakers and politicians to deal with issues quickly and move on," CommSec said in the newsletter.
CommSec expects the global economy to grow about 3.5 per cent in 2013, up from 3.3 per cent in 2012.
Europe, which was labouring under high budget deficits, would take some time to generate economic growth.
But the US, China and emerging economies were expected to achieve stronger growth.
CommSec said Australia had started 2013 in the strongest condition of any advanced economy.
Economic growth in Australia was expected to hold within the normal range of 2.5 to 3.5 per cent, with a larger contribution from home building and consumer spending.