The Statement on Monetary Policy sets out the Bank’s assessment of current economic conditions, both domestic and international, along with the outlook for Australian inflation and output growth. A number of boxes on topics of special interest are also published. The Statement is issued four times a year.
Headlines (via Reuters):
- Reiterates that period of steady rates likely to be most prudent course
- Keeps growth forecasts unchanged, nudges up inflation forecast to reflect lower AUD
- Sees GDP growth of 2.5-3.5 pct by end 2015, 2.75-4.25 pct by end 2016
- Sees underlying inflation 2.25-3.25 pct by end 2015, 2.25-3.25 pct end 2016
- Inflation to remain in line with 2-3 pct target despite latest decline in AUD
- AUD still above estimates of fundamental value, further fall would help rebalance economy
- BOJ easing, pension fund flows could boost appetite for Australian assets, keep AUD high
- Data, liaison suggest economic growth was a little below trend in Q3
- Low rates, strong population growth to support home building, prices and wealth
- Mining investment set to fall further, to subtract 1.5 ppt from GDP in 2015
- Continued strong growth in export volumes to add to gdp, especially from LNG (Liquified natural gas) in 2016
- Sees moderate jobs growth, unemployment likely to stay elevated for some time
- Wage growth seen stabilising at low levels, productivity growth to stay above average
- Slowing China property market one key risk to global outlook, impact uncertain
(Preview is here if you’re all like “WTF???”
There are no signs of lower rates on th horizon from the RBA … this from the statement:
The very accommodative monetary policy settings will continue to provide support to demand and help growth to strengthen, in time. Meanwhile, inflation is expected to be consistent with the 2–3 per cent target over the next two years. Given that assessment, the Board’s judgement at its recent meetings has been that monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.
So … period of stability ….. carry on.Nothing much new in the Statement.