Reserve Bank of Australia revealed that its board decided to keep its cash rate at 1.50 percent. Its Governor, Philip Lowe, felt that there was no change in the outlook of the Australian economy.
In a press release, he said that growth is expected to grow gradually in next couple of years to a little more than three percent. The Central Bank believes that its country’s economy is going through its transition after the mining investment boom came to an end citing a drop in mining investment while exports or resources are picking up.
Reserve Bank of Australia expects consumption growth to remain moderate and in line with incomes. Its statement pointed out that investments from non-mining remained low as a GDP share and strong pick-up is a welcome sign.
Inflation picked up to above 2 per cent in the March quarter in line with the Bank’s expectations. In underlying terms, inflation is running at around 1¾ per cent, a little higher than last year. A gradual further increase in underlying inflation is expected as the economy strengthens, the Central Bank statement viewed.