Earnings growth forecasts to be lowered

Continuing volatility in the world’s financial markets has prompted economists to downgrade their business earnings growth forecasts, it has been revealed.

A market consensus currently puts Australian earnings growth at about 25 per cent in 2010-11.

However, Citi equity strategist Richard Schellbach told the Australian that analysts were beginning to question that figure as the global situation erodes confidence in Australia’s economic recovery.

"What the price in the market is telling us – the fact the ASX 200 is down at 4300 – is that it expects that number soon to not be 26 per cent growth for 2011, it expects it to maybe be only 5 per cent," he said.

Mr Schellbach’s comments follow profit warnings from a number of local companies including Toll Holdings, Primary Health Care, Virgin Blue and Sonic Healthcare.

The news may interest Aussies wishing to compare savings accounts in search of the most stable returns. Last week, Australia’s new independent workplace-relations tribunal agreed to raise the country’s minimum wage by 4.8 per cent from July 1st in a move designed to help the country’s struggling low-income families.

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