RBA paints a rosy eco­nomic pic­ture

The Courier-Mail - - BUSINESS -

AUS­TRALIA has hit an eco­nomic sweet spot ac­cord­ing to the coun­try’s top econ­o­mists, with the lat­est mone­tary pol­icy state­ment from the Re­serve Bank paint­ing a pos­i­tive out­look for house­holds and busi­nesses.

Lower un­em­ploy­ment, gen­tly ris­ing in­fla­tion and stronger eco­nomic growth in­di­cate in­ter­est rates are set to stay on hold for the near fu­ture, al­low­ing house­holds and com­pa­nies to con­tinue to spend and ex­pand. “The Re­serve Bank has mapped out a sit­u­a­tion of near eco­nomic nir­vana,” Com­mon­wealth Bank chief econ­o­mist Craig James said yes­ter­day.

“The Re­serve has raised short-term eco­nomic growth fore­casts, trimmed in­fla­tion fore­casts and also trimmed fore­casts for un­em­ploy­ment,” Mr James said. “As al­ways there are risks but it is hard to en­vis­age a more beau­ti­ful set of num­bers.”

In its quar­terly state­ment on mone­tary pol­icy re­leased yes­ter­day the Re­serve in­di­cat- ed its cash rate would stay at around the rate of 1.5 per cent.

“The steady set­ting of mone­tary pol­icy has sup­ported sta­bil­ity and con­fi­dence in the Aus­tralian econ­omy,” the Re­serve said.

AMP chief econ­o­mist Shane Oliver said the Re­serve was talk­ing up the econ­omy.

“They’re too op­ti­mistic, too up­beat, maybe they have to be be­cause they want things to im­prove and they don’t want to talk any­thing down,” Dr Oliver said.

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