RBA paints a rosy economic picture
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.