Australia’s Economy is Flat

Australia’s Economy is Flat

Australia’s central bank stuck to its upbeat view of the economy after it held rates at record lows in a widely expected move Tuesday, a day before GDP data is likely to show domestic momentum almost stalled last Quarter.

The Reserve Bank of Australia (RBA) ended a 30th meeting running with rates at 1.50% and signaled a steady policy outlook as it awaits a pick up in economic growth and inflation.

That wait may prove longer with a run of soft data from consumption to housing this week leading analysts to downgrade forecasts for Q-4 growth to near nothing. Official figures on GDP are out Wednesday.

A weak number could jeopardize re-election prospects for Australia’s center-right government which has been pitching “jobs and growth” as its Key mantra.

The Liberal-National government faces a tough election in May and is widely expected to entice voters with tax cuts and more spending in its annual budget on 2 April.

Analysts polled by Reuters suspect the economy expanded by a sub-par 0.3% in the December Quarter, after a disappointing 0.3% rise in Q-3 of Y 2018.

Annual growth is seen slowing to 2.5% from 2.8%, making the RBA’s call for 3% this year look optimistic.

Stay tuned…

Australia, economy, GDP, flat, tax, cuts, spending, RBA, bank, inflation,

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