The war in Ukraine overshadowed financial markets throughout the month, but hopes of a breakthrough in peace talks lifted sentiment towards risk assets. Solid gains among US-listed stocks helped the MSCI World Index rise more than 3%.
The Budget boost for low to middle income earners, in particular, was designed to improve the Government’s approval ratings ahead of May’s Federal Election.
Other forecasts released alongside the Budget provided further grounds for optimism. Officials expect unemployment to fall to 3.75% later
this year – from 4.0% currently – and annual wage growth to rise above 3% for the first time in a decade.
If these forecasts prove accurate, the Reserve Bank of Australia is more likely to follow other central banks and start raising official
interest rates in the months ahead.
The global economy is being shaped by conflicting triggers. These include productivity-boosting technology innovations, geopolitical tensions and the strident efforts of central banks to bring inflation under control. We examine the economic outlook and discuss the implications for your retirement savings.
With inflation coming off the boil, there was optimism that borrowing costs have peaked and could be lowered later this year. In turn, this could be beneficial for corporate earnings.
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