The coming year will be one for "hunkering down" amid offshore economic shocks, Aussie CEO Stephen Porges has said.
Porges told Australian BrokerNews he does not expect a robust economic recovery in 2012, but rather more of the uncertainty that defined 2011. While Aussie spent 2011 diversifying its product base, Porges said 2012 will be a year of "working on the core business".
"This is not a year for radical change. It's a year for hunkering down and sharpening your core business, and that's probably what we'll be doing," Porges said.
Uncertainty will continue to filter through the economy as a result of European debt concerns and a sluggish recovery in the U.S., Porges predicted.
"We don't know what's going to happen, and what effect that's going to have of the domestic economy, domestic bank funding, the mortgage market or our business," he said.
Porges said 2012 could "quite easily be as depressed as 2011" due to ongoing offshore instability. While he predicted the Reserve Bank will continue to cut interest rates, he said this is not necessarily a desirable result.
"There are likely to be rate cuts, but if they come as a response to weakness in the economy, well, be careful what you ask for," he said.
A potential bright spot for 2012 could be a revival of demand for property, providing a boost to the mortgage market. Porges said he expected at least some recovery in credit demand over the year.
"I actually think we will start seeing a bit more recovery in domestic demand. There's a lot of pent up demand, and at some stage that will have to start coming through again," he said.
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