Ryan Stokes says Australia has so far been able to weather the barrage of rate rises over the past 15 months, but another hike could push it over the edge.
Ryan Stokes, the head of $10 billion industrial giant Seven Group Holdings, has warned that another rate hike from the Reserve Bank could push the Australian economy into recession.
“I think the issue which will determine the outlook for a recession – and its intensity – is going to be the future decision points of the RBA [...] That’s going to be the biggest factor weighing into whether we have a genuine recession versus a technical one.” The size of China’s economy meant there would still be sizeable demand for Australian iron ore, benefitting Seven’s customers, who he said were further hedged against a softening in global metal prices by maintaining the lowest-cost production in the mining industry.Seven released its full-year results on Thursday morning, which included a 55 per cent rise in operating cash flow to $1.
“The core industrial businesses continued to outperform expectations, and guidance for high single to low double-digit [growth for the current financial year] is ahead of our current forecasts,” said Macquarie analysts Mitchell Sonogan and Sophia Owad in a note to clients.
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