Comments from Paul Bloxham of HSBC
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- Further AUD appreciation could weigh on growth prospects for the likes of the education and tourism sectors which are vital to rebalancing the economy
- Education is now Australia's third largest export earner - behind iron ore and coal - bringing in close to $20 billion last year
- While much of the pick-up in education has been structural with increasing wealth in Asia, the lower Australian dollar has played a significant part in boosting the export services sector
- Although the structural lift in services exports is likely to continue, somewhat irrespective of the currency, further appreciation of the currency could weigh on the growth prospects in this industry
- This is particularly the case, given that tourism and education are highly competitive global industries
- In short, as growth shifts to being more driven by services exports, the role of a competitive currency may become increasingly important for Australia's growth prospects.
