Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Learn
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

RBA still sees growth upside at 3pc a year

AAP  |  04 Aug 2017Text size  Decrease  Increase  |  

Page 1 of 1

SYDNEY - [AAP] The Australian economy is chugging along as expected and remains on track to expand at around 3 per cent a year, the central bank says.

The Reserve Bank of Australia's quarterly Statement on Monetary Policy, released on Friday, contains a few positive adjustments to its earlier outlook.

"The economy is expected to grow at an annual rate of around 3 per cent over the next couple of years, which is a bit higher than estimates of potential growth," it said.

As a result, the jobless rate is expected to "edge lower" and underlying inflation to rise to around 2 per cent over the second half of 2017 and into 2018.

"The outlook continues to be supported by accommodative monetary policy and an improvement in the global economy," the RBA said.

Earlier this week, the central bank board left the RBA cash rate unchanged at 1.50 per cent, where it has sat for a year.

The RBA reinforced that decision on Friday, saying this was providing "appropriate support" for the economy.

The central bank also pointed to recent improvements in labour market conditions, in line with its expectation for a "gradual" recovery in wages growth.

"Wage growth is then expected to pick up gradually over 2018 and 2019," it said.

But it did note the likely upward pressure on inflation from higher power prices.

"There is considerable uncertainty about when and how the range of factors that contributed to the increases in wholesale utilities prices will be resolved and how large the direct effects on retail utilities prices will be," the RBA said.

THE RBA'S LATEST GROWTH FORECASTS (year-end rates):

* December 2017--2pc to 3pc

*June 2018--2.5pc to 3.5pc

* December 2018--2.75pc to 3.75pc

*June 2019 and December 2019--3pc to 4pc

 

AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.