RBA Sees Lower Growth Ahead

Australia’s central bank lowered its growth forecast, predicted higher unemployment and said it was prepared to adjust policy if needed as business spending fails to fire and China struggles with an economic transition.

“The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand,” the Reserve Bank of Australia said Friday in its quarterly monetary policy statement in Sydney. “Growth in the Australian economy is expected to continue at a below-average pace for a little longer than earlier anticipated.”

Governor Glenn Stevens and his board cut interest rates to a fresh record of 2 percent on May 5 and said the reduction would “reinforce recent encouraging trends in household demand.” That positive comment and the lack of any indication that it could cut further fostered predictions the easing cycle had ended. Today’s forecasts paint a more somber picture.

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.