"As has been the case for some time, low interest rates are expected to support a pickup in consumption growth over the forecast period, despite expectations that income growth will remain low"
-Reserve Bank of Australia
The Reserve Bank of Australia delivered a more positive assessment of the nation's economy, saying the monetary policy was likely to remain unchanged for the time being. While the central bank downgraded its economic growth outlook for the current financial year by half a percentage point, it estimated growth pace to accelerate to between 3% and 4.5% by December 2017. Additionally, in its quarterly statement on monetary policy, the central bank said the unemployment rate would peak below the RBA's previous projected high of 6.5%. Governor Glenn Stevens seemed particularly happy with recent jobs creation, and refrained from voicing his recent concerns about the Australian Dollar being overvalued. The currency has lost about 10 US cents since January to around $0.73. Mining investment was predicted to decline, but the housing sector was showing a strong performance and other parts of the economy would benefit from a weaker Aussie dollar, such as tourism. The RBA revised its forecasts for inflation in the coming years by half a percentage point. The weaker currency is expected "to place upward pressure on the final prices of tradeables over the next five years," the bank said.
The RBA board kept the cash rate on hold at a record low of 2%, and said the current low level of interest rates "remain appropriate".
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