Corporate Australia has shown remarkable resilience in the face of rising interest rates, leaving traders and economists alike in awe. National Australia Bank Ltd. CEO Andrew Irvine is no exception to this surprise, as he acknowledged that the current business credit growth has been “surprisingly surprising on the upside.”
What sets Australia apart from other countries is its strong performance despite sticky inflation, a tight labor market, and resilient house prices despite high borrowing costs. Money markets have shifted their expectations from a rate cut from the Reserve Bank of Australia to now pricing in a 50% chance of a rate increase in November.
Irvine identified several key drivers of the economy’s strength, including industries such as minerals, mining, agriculture, defense, health care, and manufacturing. He emphasized that while these industries often receive less attention than those facing challenges, they are thriving nonetheless.
Individuals facing financial difficulties should proactively communicate with their lenders to address any potential mortgage stress. Despite this challenge, the robust performance of businesses in Australia has defied expectations and contributed to the country’s economic resilience.