12 November 2018
Last week, the Reserve Bank of Australia kept its record low interest rate unchanged at 1.50% even after upgrading its economic and inflation outlook and tipping the jobless rate to fall to a decade-low of 4.75%.
RBA governor Philip Lowe said in a statement on Tuesday that economic growth was forecast to average about 3.5 per cent this year and in 2019, above trends since the 2008 global financial crisis and slightly more than the RBA’s previous estimates of 3.25 per cent.
The central bank’s outlook for the labour market was also more positive and it noted skill shortages were starting to bite in some areas as it hopes for a long-awaited pick-up in wages.
The RBA tipped the jobless rate to fall below 5 per cent in 2020, lower than its most recent best guess of full employment. It believes that business conditions are positive and non-mining business investment is expected to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports.
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