Will Trump’s presidency hurt Australia?
As the world comes to terms with the election of Donald Trump as the 45th President of the United States, Australians are rightly questioning the impact it will have on Australia’s financial and property markets.
But will it be the disaster that many are predicting?
REA Group chief economist Nerida Conisbee outlines the likely impact the Trump presidency will have on Australia.
And not all of it’s bad.
First quarter of 2017
Will the US head to recession? We will know by early next year and it will depend on how unstable Trump is as a president. From Australia, he looks incredibly unstable. The UK has narrowly escaped recession following Brexit.
The rest of 2017
The impact next year will depend on how unstable Trump is as a leader. And whether changes he has proposed during his campaign make it through the senate.
Will Trump spark a trade war? He has been very vocal about upping tariffs to China and Mexico. Increases in tariffs and scrapping of trade agreements will lead to economic downturn in the US, job losses and impacts on a global level.
Is he a global political risk? He is backing another very unstable leader, in Vladimir Putin. There is a lot of political instability around the world already and this will add to it.
The impact on Australia
The immediate impact is that global financial markets will be volatile, while Australian property could be a beneficiary, as it is seen as a safe haven.
Longer term, any economic downturn in the US will be bad for Australia. Any period of lower growth will impact our economy.
Nerida Conisbee is the chief economist of REA Group.