Colonial First State economist James White warns that a lower AUD will make households poorer, widen inequality and hurt the economy in the long run:
- He says companies will not regard the weaker currency as permanent and will therefore still be reluctant to invest
- “I think moving away from mining investment is a good thing but the weak $A isn’t going to get us there, it will just make Australian mining more competitive”
- If we were a manufacturing economy, a weak currency would help us but we are not we are a service economy. We don’t have the substitution industries to take advantage of the falling dollar”
