Good economic times ahead: UBS

UBS executive director talks up Australia's economic prospects and says there is no sign US will "double dip"

By Rob McKay | August 6, 2010

Australia is well-placed to push ahead with the economic recovery, UBS Bank Executive Director Jeffrey Dick says.

Dick, the head of investment management looking after the Transport Industry Superannuation Fund, says current market volatility is a historically accurate reflection of its behaviour in the 24 months after a major downturn, describing it as the "terrible twos".

Despite that, OECD, Thompson Reuters and UBS forecasts have Australian growth at 3.5 percent and 4 percent for calendar 2010 and 2011 respectively.

"We’ve weathered the storm very, very well," Dick says.

Bolstering that was global growth at 4.1 percent and 3.8 percent respectively.

While Europe remained a serious worry, Dick says: "There is no sign that the US will double dip".

"US manufacturing has turned up very well," he adds.

UBS expects the oil price to remain steady, with West Texas Intermediate range-bound in the region of US$70-US$80 in the next two years.

While the Australian dollar is likely to rise marginally against the US dollar in the short term, it too is likely to be range-bound at around 90-95 US cents and would find it very difficult to rise to parity.

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