“Tariffs are generally bad for everyone but especially problematic for the country imposing them,” Robertson said. “So, with the escalation between the US and China – the world’s two largest economies – it’s a question of just how much slower these economies will be growing this year and next.”
The IMF now expects US economic growth to fall to 1.8% this year, while China’s forecast has been cut to 4%. Australia is also feeling the impact, with its expected growth rate for 2025 lowered from 2.1% to 1.6%.
Despite the external headwinds and political uncertainty in the lead-up to the federal election, Australia is relatively well placed compared to other economies, according to Robertson.
“Australia’s lower exposure to tariffs than our peers, and lower interest rates ahead, should see a rebound in consumer sentiment later in the year, with outperformance in our region,” he said, adding that while volatility is likely to persist, key trading partners could prove more resilient than others around the world.
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