Goldman Sachs says a drought in Australia to cut growth in 2016 to the weakest in 24 years, which could see the Reserve Bank of Australia reducing interest rates.

This feels a bit weird ... I posted on this a couple of weeks back

Lucky I've got a good memory (except for the name of that person I just met like 5 seconds ago ... go figure)

Anyway, more via Bloomberg:

  • The strongest El Nino in 18 years ... to produce weather that parches Australia's farms and ranches

(we've got ranches in Australia? OK, back to it ...)

  • The fall in rural production would compound problems in an economy already struggling with slumping commodity prices and record-low private-sector wage rises

Tim Toohey, chief economist for Goldman Sachs in Australia:

"A drought in a period where non-farm economic growth is already forecast by policy makers to be well below trend and inflation pressures contained is a sufficient reason to warrant additional monetary easing."

More at the link

-

ps. El Nino is a warming of Pacific Ocean surface temperatures. The current phenomenon, saus the Australian Weather Bureau, is the strongest since 1997

pps. The next Reserve Bank of Australia meeting is on Tuesday next week, November 3. Expectations are for an on hold decision from the RBA at this meeting, I concur.