RBA dep head of Economic Analysis Dept speech - full text

Author: Eamonn Sheridan | Category: Central Banks

Reserve Bank of Australia Deputy Head of Economic Analysis Department, Merylin Coombs

(the Kimberly is a remote region of Australia, way up north west)

Highlights on the macroeconomic aspects of the speech, what the RBA is seeing:

Our expectation is that GDP growth will remain a little above 3 per cent for the next year or so, which will further reduce spare capacity in the economy. As the labour market tightens, wages growth and inflation should increase gradually.
There have been a number of factors supporting these quite positive outcomes
  • monetary policy in Australia has been accommodative
  • global economy has been expanding quite strongly.
  • Even though trade tensions between the United States and China have increased this year, China's growth has held up while slowing a little.
  • commodity prices for many of the products we export have been higher than we had expected
  • We continue to expect resource commodity prices to decline during 2019 as growth in China's demand for steel slows and additional global supply of bulk commodities comes on line. 
  • we do not expect commodity prices to fall as far as the lows experienced in 2015/16
The final factor that I wanted to highlight - and the one that I wanted to spend the most time on - relates to what has been happening at the state and territory level. This too helps explain the improvement in national outcomes. Briefly, the variation in outcomes across states has lessened considerably over the past year or so, as conditions in the mining-exposed states have improved.

Not a bad run down. Missed out on high levels of debt as a risk factor. what else?

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