Growth outlook is bad news for businesses

Australian companies will be concerned about the latest economic growth forecasts laid out in the Westpac/Melbourne Institute Leading Index.

The report suggested that economic expansion in March stood at just 2.2 per cent – which is significantly lower than the original prediction of 2.9 per cent.

Although things are clearly moving in the right direction, the slow rate of growth is very disappointing.

Firms throughout the country were handed a boost at the start of the month when the Reserve Bank of Australia lowered the cash rate, which prompted lenders to reduce the interest rates attached to their business loans.

However, with so much uncertainty surrounding the global economy, a lot of organisations have been reluctant to take on too much extra debt.

Westpac's chief economist Bill Evans said: "The growth rate has picked up somewhat from the absolute low in November last year, but the level in March does not encourage too much optimism."

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