Consumer and business confidence in Australia should rebound this year if the global economy stays relatively stable, Commonwealth Bank chief executive Ian Narev says.
Mr Narev said that since August, 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 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 and the fragility of the US economic recovery.
"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.
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, up from 3.3 per cent last year. Europe, labouring under high budget deficits, would take some time to generate economic growth.