RBA Tips Booming Economy

Posted on 8/11/2018  
RBA Tips Booming Economy

The Australian economy is poised for two years of strong growth, with the Reserve Bank predicting the strongest expansion since the last two years of the Howard Government.

It’s also forecasting that unemployment will fall to its lowest level since December 2008.

While this week’s RBA board meeting kept the benchmark cash rate at its record low of 1.5% for the 26th consecutive month, the Reserve Bank is increasingly confident the strong economy will start generating higher wages and inflation over the next year.

It expects the economy to expand by 3.5% this year and next, driven by strong government spending, business investment and resources exports.

“The Australian economy is performing well,” RBA Governor Philip Lowe says, noting that it had achieved 3.4% growth over 2017-18 and unemployment had dropped to a six-year low of 5%.

The Reserve Bank expects the jobless rate will continue to edge lower, dropping to 4.75% over the next two years.

Lowe says employers are finding it hard to hire the skilled staff they want in some sectors, while the number of job vacancies is high.

« Back