Growth predictions could be good for savings accounts

New research has indicated that the Australian economy is set for growth next year, which could be good news for people’s savings accounts.

According to the survey conducted by the Westpac-Melbourne Institute, which predicts activity of three to nine months in the future, the second half of 2009 will be slow, but the outlook is significantly brighter for 2010.

The index showed an expansion rate of minus-1.8 per cent in July, which was an improvement on the minus-3.3 per cent in June and minus seven per cent for May.

Bill Evans, a Westpac economist, said the group expects this momentum to build into next year, which may be welcomed by those with high interest savings.

"The pace of improvement in the growth rate of the leading index and, indeed the level of the index, points to a significant improvement in growth prospects in 2010," he commented.

Meanwhile, the Reserve Bank of Australia monetary policy minutes were released recently, which indicated the time is still not quite right to increase interest rates, since it may dampen consumer confidence.

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