At it's meeting on April 2nd, the the board of the Reserve Bank of Australia have decided to once again leave the cash rate unchanged at 1.50%
- The outlook for the global economy remains reasonable, although growth has slowed and downside risks have increased.
- Growth in international trade has declined and investment intentions have softened in a number of countries.
- The Australian labour market remains strong. There has been a significant increase in employment and the unemployment rate is at 4.9 per cent. The vacancy rate remains high and there are reports of skills shortages in some areas. The stronger labour market has led to some pick-up in wages growth, which is a welcome development.
- The adjustment in established housing markets is continuing, after the earlier large run-up in prices in some cities. Conditions remain soft and rent inflation remains low. Credit conditions for some borrowers have tightened a little further over the past year or so.
- Inflation remains low and stable. Underlying inflation is expected to pick up gradually over the next couple of years, although this has been taking a little longer than earlier expected. The central scenario is for underlying inflation to be 2 per cent this year and 2¼ per cent in 2020.
The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.
To view the full statement of Phillip Lowe, Governor of the Reserve Bank, please click here.
Published : 02 Apr 2019