It's complex but overall, in my judgement, the Australian economy is adjusting quite well in the circumstances – certainly far better than in other episodes of commodity price fluctuations we have seen in history. That said, the adjustment is still a work in progress.
The lack of confidence in the sustainability of public finances led to a situation where short-term developments or negative economic surprises caused strong market reactions. From a medium-term to long-term perspective, the size and intensity of the reactions appear to be – in part – unjustified.