Australia’s central bank on Friday gave a more somber assessment on the economy and said that growth was likely to remain below trend for longer as it justified its decision to resume cutting interest rates this week.
In a 78-page quarterly statement, the Reserve Bank of Australia (RBA) also highlighted a string of uncertainties facing the economy, not least the combined effect of the collapse in oil prices and a lower exchange rate on domestic activity and inflation.
“New information suggests that consumption growth and non-mining business investment are likely to pick up later than previously had been expected, and that LNG production is likely to ramp up a bit more gradually than earlier expected. Lower export prices are expected to dampen the growth of incomes and activity,” the RBA said.
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