Economic outlook

• Overall


  Economic outlook - refers specifically to the projected changes to the level of economic growth throughout the world

  There is not only an Australian economic cycle but a global economic cycle which varies among countries

  Increasing demand for products and services → for a business in Australia, this may mean that businesses will need to increase production to meet demand and therefore require funds to purchase equipment
• Impact of demand and interest rates

  Increasing demand for products and services → for a business in Australia, this may mean that businesses will need to increase production to meet demand and therefore require funds to purchase equipment

  A decrease in the interest rates on funds borrowed internationally from the financial market → results mainly from a decrease in the level of risk associated with repayments (as business sales increase, so do profits)
• Influence on businesses and financial management


  This impacts on Australian business e.g. GFC (regressed global economic outlook especially in Europe and the States) means a reduction in activities/reduce costs

  Influence on financial management: The global economic outlook will have a direct effect on the demand for Australian exports; that is, a positive outlook will increase demand for Australian products whereas a negative outlook will decrease demand.