US downfall from fiscal cliff crisis may affect Australia
AMERICA falling off the fiscal cliff would be the most serious jolt to the global economy since the financial crisis, and could be felt on Australian markets as early as Monday morning, economists say.
Saul Eslake, Australian economist with Bank of America Merrill Lynch, said a worst-case scenario for Australia would be a shock to confidence, strengthening of the dollar, a fall in commodity prices, and weaker overall growth.
"The risks are now non-trivial," he said.
Hopes are fading for a political deal to avert a crisis, with the US House of Representatives due to meet on Sunday for an urgent session to try to reach a last-minute deal.
Should a deal fail, it would take some time for the real economic effects to play out globally and in Australia. But the impact on local financial markets could be immediate.
Read more at Brisbane Times