- Glenn Stevens, Reserve Bank of Australia Governor
Reserve Bank of Australia Governor Glenn Stevens said that even though the Australian economy has been growing, the pace of expansion has not been strong enough, calling on reform, instead of monetary policy to ensure higher production. Australia's economy has been growing nearly 2.5% annually in the recent quarters, but Stevens said that the economy could be performing better. The key reason Australia's economy has been expanding at a below-trend pace over the last few years is the steep decrease in mining investment, due to a global commodity slowdown as demand from the world's second biggest economy, China, weakened. The RBA has cut interest rates twice so far this year, but said that monetary policy has only limited impact when rates are already at very low levels. The official cash rate currently stands at 2.0%, the lowest level ever in the country's history.
Meanwhile, construction work done in Australia surprisingly rebounded in the second quarter, after falling at a faster than predicted pace in the three months through March. According to data from the Australian Bureau of Statistics, total construction work for the April-June period increased 1.6% to $49.81 billion, on a seasonally adjusted basis. June's data followed a surprise 2.4% drop during the March quarter against predictions of a decline half that size.
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