A hung parliament has added to uncertainty in the outlook for the Australian economy, with investor and consumer activity likely to remain on hold until a government is officially elected.
In an extraordinarily close result in the federal election over the weekend, Australians may have to wait as long as 10 days before they know whether Julia Gillard or Tony Abbott will be governing the country.
“Coming at a time of renewed concerns regarding the global economic outlook, the Australian election outcome will likely add to local investor nervousness in the short term,” AMP chief economist Shane Oliver said over the weekend.
According to Mr Oliver, concerns as to who will govern the country, fears of a possible drift towards less business-friendly policies as a result of increased Greens power, and a likely absence of productivity boosting longer term reforms under a minority government, will all add to jitters in the economy this week.
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