Aussies talking down economy: Stevens

by Adam Smith20 Mar 2012

Australians are talking the economy down while foreign investors still see strength, RBA governor Glenn Stevens has claimed.

Stevens, speaking to a Credit Suisse conference in Hong Kong, said overseas investors perceive the Australian economy as robust, having dodged the GFC. He conceded, however, that there is concern among the global community over the Australian housing market.

"Some observers worry about high levels of housing prices and household debt. This is understandable given the problems that have occurred in some other countries," he said.

But Stevens claimed overseas investors also point to the low rate of mortgage arrears and the strong underlying demand for housing.

Australians see the picture differently, Stevens said. With consumers remaining wary and many dour on the future of the economy, Stevens said global perceptions of Australia versus those at home have flip-flopped.

"This difference in perceptions between foreigners and locals is quite unusual. For most of my career, the difference has tended to be in the opposite direction. We always seemed to struggle to get foreign observers and investors to give us credit for performance we thought was pretty reasonable. And it is only little more than a decade ago that Australia was being described as an ‘old economy’. Now perceptions have changed, at least in a relative sense," he said.

Stevens commented that the overall recent performance of the Australian economy was "not too bad", but could be improved by gains in productivity.