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Australian Reserve Bank forecasts lower growth, higher inflation

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Staff Writer | February 11, 2017
The Reserve Bank of Australia (RBA) released its statement on monetary policy, warning of lower GDP growth, and higher inflation than previously forecast.
Australian Reserve Bank
Oceania   The Reserve Bank of Australia warned
The central bank's range on growth for Australia in 2017 is now between 1.5 to 2.5 percent, down a full 1 percent on the growth levels they predicted in November last year.

The fall was attributed to lower than expected gross domestic product results during the third quarter of 2016, with weaker household spending numbers playing a huge part in that contraction.

"Subdued growth in household income is likely to continue to constrain consumption growth over the period ahead," the RBA said.

"The forecast for consumption growth has been scaled back a little to reflect recent data and a view that consumption is unlikely to grow materially faster than income over the next couple of years."

Looking ahead, the Reserve Bank was confident that the growth will continue for Australia into 2018, with their assessment predicting a range of 2.75 to 3.75 percent, but warns there is uncertainty due to possible change of U.S. policies.