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A National Australia Bank (NAB) sign can bes een above an automatic teller machine (ATM) in central Sydney November 12, 2014. National Australia Bank said on Wednesday it was moving to settle a class action brought against Australia's major banks over fees for late payment, opening the door to millions of dollars in compensation for disgruntled customers. The class action, Australia's largest, was brought in August by law firm Maurice Blackburn against NAB, Australia and New Zealand Banking Group Ltd, Westpac Banking Corp , Westpac units St George and BankSA, and Citigroup Inc's Citibank over late payment fees that it claims were excessive and unfair. REUTERS/David Gray

While at home all may seem upbeat, the picture of our economy looks quite different from the outside. According to a report by the National Australia Bank, foreign investors are not too keen on the economic prospects of Australia.

According to chief economist Ivan Colhoun, there is a collective negative view on Australia’s economy which he realised while visiting clients in Britain, Continental Europe and the Middle East.

"I have never experienced such overwhelming negativity on the outlook for the Australian economy and Australian dollar in all my years marketing the Australian economy offshore," he wrote in the report released on Monday. "To be fair, one investor did say that they were not that negative on Australia. Another described the Australian economy as toast."

The downcast in the views of foreign investors have stemmed from global economic factors such as lower commodity prices, global demands and the slowdown of the Chinese economy. Another major factor is Australia’s growing dependence on the housing sector to fill up the gap created by the plummeting investments in mining-related infrastructure. This has resulted in the fall of overseas demand in Australian, shares, bonds and currency.

Experts have also warned that the current foreign interest in Australia’s property market, mainly that of the Chinese investors would also eventually decline.

However, Colhoun pointed out that the falling investments in the mining sectors of Australia will bring other non-mining sectors of the economy to the forefront.

"At the present time, the improvement in the non-mining economy is more than outweighing the drag from mining, particularly in an employment sense," he said.

With regards to China, Colhoun said that the Australian mining sector has taken the brunt of the Chinese industrial production and housing, but the non-mining sector remains largely unaffected.

Colhoun also added that even if foreign investors are apprehensive about investing in Australia, they are not yet making it too apparent due to the country's frequent changes in leadership.

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