Craig James, Chief Economist, @CommSecLate April 2016

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Important Information

This presentation has been prepared without taking account of the objectives,

financial situation or needs of any particular individual. Before acting on the

information in this seminar, you should consider its appropriateness to your

circumstances and, if necessary, seek appropriate professional advice.

Commonwealth Securities Limited ABN 60 067 254 399

AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of

Commonwealth Bank of Australia ABN 48 123 123 124 and a Participant of the

ASX Group.

Examples used in this presentation are for illustrative purposes only.

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The Big Issues

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Will oil prices rebound to US$100/barrel?

Supply/demand

Winners/losers

Competition for energy

Lower costs

Technology

The next China?

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Low inflation here to stay?…

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Global: Can do better…

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United States: Time on its hands

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China: Consumers to lead

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Australia: In good shape

StocktakeWorld-leading growth

Jobless rate 26-month low

Record car sales

Record dwelling starts

Record tourist arrivals

Above-normal spending

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Animal spirits return

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Housing: leads the way nationally

StocktakeMore homes

Apartments dominate

Slower population

Softer home prices

Watch vacancies

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Home prices: In context

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Future issues: Tax & spending

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Interest Rates: On hold

Stocktake ‘Easing bias’

Low inflation

But good economy

Inflation watch

Jobless rate in focus

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Aussie Dollar: Getting ahead of itself?

StocktakeUS rates to rise…slowly

Aussie rate cut?

China doubts

Commodity prices

Firmer Aussie economy

Tourism lifts

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Shares: Making profits, paying dividends

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Outlook

FORECASTS20162015

2.75-3.25%3.00%Economic Growth

2.25-2.75%2.00%Underlying inflation

5.50-6.00%5.80%Unemployment

end 2016mid 2016

1.75-2.00%1.75-2.00%Cash rate

5,500-5,7005,200-5,400Sharemarket (All Ords)

US73-79cUS72-78cAustralian dollar