Australia's economy will be strong and is on the upswing for a boom within the next decade, a leading economist says.
BIS Shrapnel chief economics Frank Gelber, speaking in Brisbane yesterday, said the boom would come as a result of the country's strong exports to the thriving continent of Asia, a strong mining sector and fiscal stimulus during the global financial crisis.
"All of the pre-conditions that led to the GFC are gone," Dr Gelber said.
"The mining drivers are here for another five years at least.
"Five years from now this economy is going to be really strong coming from an undersupplied, under capacity situation.
"The boom won't mature in 18 months, it will take six or seven years, or eight or nine."
But the equity markets were gushy, he said, which was keeping a lid on the upswing.
"Now is the time where I would go aggressively equity and away from fixed interest because the risk is gone," Dr Gelber said.
The US, UK and some European markets would take more than a decade to recover, Dr Gelber predicted.
Nor does he say those markets are having a double dip recession, because they didn't recover fully from the original hit from the financial meltdown.
Australia's situation was different from overseas and the country was emerging from a relatively mild downturn.
Specifically, he said Queensland had recovered well, as it was the first state hit the hardest by the GFC.
But it was not only mining holding up the economy, Dr Gelber said, because the stimulus was largely responsible for staving off the impacts of the GFC.
Handouts had staved off a recession.