Philip Lowe is the Deputy Governor of the Reserve Bank of Australia and is the hot favourite to replace Governor Stevens in September.

  • Reiterates low inflation provides scope for easing if needed
  • Will be important for economy to keep up with growth in labour force
  • Signs economy successfully rebalancing, even if not returning to pre-2008 growth rates
  • Says economic growth bit stronger than expected over 2015, kept unemployment steady
  • Says GDP report confirmed household spending had picked up
  • Central scenario still for GDP growth a bit below trend in 2016, then quickening
  • Says rising home supply helping moderate prices, still watching very closely
  • Monetary easing abroad a "complication" as it puts upward pressure on AUD
  • Past fall in A$ helping tourism, education, agriculture
  • Global economy still has momentum, though data mixed

Headlines via Reuters


The Australian Financial Review has an analysis up very quickly - kudos to them:

  • Lowe says the national income squeeze of the past few years - which has left average real incomes no higher than they were in 2008 - looks set to ease as the drag from falling commodity prices lessens.
  • In an wide-ranging and upbeat speech about how wage, inflation and currency "flexibility" has cushioned the economy during troubled times, Dr Lowe also warned that the coming improvement wouldn't allow Australians to escape the need for tough budget and policy choices.

The article appears to be ungated


Something that is maybe not too clear from those quick headlines above is Lowe's emphasis on the importance of the employment figures going forward:

  • "An important factor here will be whether the growth in aggregate demand continues to be sufficient to accommodate the growth in our labour force"

The RBA is keeping an eagle eye on the employment data and especially the unemployment rate.