The Australian economy is stabilising and showing signs that conditions are holding up quite well, according to Greek Australian economist Spiros Papadopoulos.

Mr Papadopoulos, a Senior Economist for National Australia Bank (NAB), highlighted to Neos Kosmos English Edition (NKEE) that the evidence in the economic data suggests a cautiously optimistic outlook for the economy.

“We saw house prices rise in the June quarter, [while] retail spending is being quite solid and consumer confidence has improved, which we saw through the 3.7 percent increase in the latest figures,” Mr Papadopoulos pointed out.

“All the leading indicators suggest that the worst is behind us, as we are not going to contract for as long or as severely as people were fearing early in the year,” he added.

Mr Papadopoulos concedes that the economy is still “fairly soft” with business investments at a low and rising unemployment rates, but he predicts that a recovery could be nearing.

“There is enough evidence in the data to suggest that we’ll see a recovery take hold over the next 12-18 months,” he said.

This is the reason why many economic analysts including Mr Papadopoulos predict that the Reserve Bank of Australia will move next to raise interest rates.

When asked about the impact of the stimulus packages Mr Papadopoulos indicated that consumer spending will slow down “after the cash hand outs wash out of the system”.

But he underscored that consumer and business confidence has held up because economic growth has followed the same track.

“Unemployment has not risen as much as people were expecting,” Mr Papadopoulos noted. “They were people who thought that unemployment would rise to 9, 10 or even 11 percent and it’s quite clear that this is not going to happen,” he explained.

He agreed that unemployment will rise, yet at a more modest level of 7-7.5 percent.

Another factor that must be taken into account when one forecasts the possible economic scenarios in the near and medium term future is the performance of the US economy.

Mr Papadopoulos argues that the US economy seems to be approaching a turning point.

Although the official data from its GDP growth is still negative, Mr Papadopoulos suggests that certain economic figures in monthly indicators “show signs of an improvement”.

“House prices [in the US] increased in the latest figures for the month of May, which is the first increase in over two years,” Mr Papadopoulos emphasised.

Additionally he highlighted the significant decrease in the number of people who are losing their jobs each month despite the fact that it still remains high.

“The pace of contraction of the US economy is slowing and if things continue like they have in the last few months we could see growth by the end of the year,” he said.

The general economic assessment, can be summarised: we’re not out of the woods yet but we’re beginning to find our way back to economic recovery.