RBA’s Christopher Kent, Assistant Governor (Economic), speaking at an Australian Business Economists ‘Lunchtime Briefing’ event. The topic is ‘The Business Cycle’:

  • Growth to be below trend until pick up in 2016
  • Says high AUD, falling mining investment, fiscal tightening to weigh on growth
  • Reiterates AUD above estimates of fundamental value given falling resource prices
  • Very low rates will continue to encourage households to save less, spend more
  • Says consumption will eventually boost jobs growth, lower unemployment
  • Plays down concerns about sluggish growth in household incomes
  • Conditions in place for pick up in non-mining business investment
  • Non-mining business investment could be lower than in past without dragging on GDP

More:

  • Says AUD may depreciate once fed starts raising rates
  • Non-mining invest pickup may not be as strong as in past
  • Sees mining investment falling more rapidly in coming year
  • Moderate pace of growth in 2q maintained in recent month
  • Sees Australia growth pick-up to above-trend pace by 2016
  • Sees average growth for major trading partners next 2 years

Quick headlines via Reuters and Bloomberg

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AUD edging a little higher

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Full text: The Business Cycle in Australia

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RBA Kent2