RBA boss optimistic on growth
LIKE his predecessor, Reserve Bank governor Philip Lowe is a glass half full kind of guy.
But he’s nothing like Ken Henry, the former Treasury chief who is pessimistic about the economic outlook.
While there are still plenty of risks in the world economy, Dr Lowe believes it is in better shape than it has been for some time.
The “animal spirits” of the business world which have been missing for quite a while “might just be starting to come back”, he told the Crawford Australian Leadership Forum at the Australian National University yesterday.
Dr Lowe expects economic growth will be a bit stronger over the next couple of years.
“The pick-up in the global economy said.
Dr Henry made comparisons between the economy in 1983 when the Hawke Labor government came to power and now.
Unemployment then was 10 per cent, compared with 5.5 per cent today; inflation was 11.5 per cent versus around 2 per cent in 2017; the economy was is helping us,” he in a deep recession with a growth rate of minus 3.5 per cent whereas it is 1.7 per cent now, albeit low by historical standards.
Furthermore, Australia’s terms of trade have grown 45 per cent since 1983.
“It all sounds pretty good, so why is it ... I am much more pessimistic than I ever was in 1983?” said Dr Henry.