Australian Reserve
Bank of America spoke about its expectations for the Reserve Bank of Australia’s decisions to reduce interest rates in the coming period, and also, its analyzes of the economic conditions in the country and their potential impact on the course of monetary policy in Australia.
From this standpoint, the bank suggested that the Australian Reserve would not begin reducing interest rates before 2025. In other words, the Australian Central Bank would likely maintain its tightening policy at current levels for a longer period of time.
Bank of America added that the Australian Reserve has already finished the interest rate hike cycle, most likely as a result of the slowdown in the growth of the Australian economy, citing the weak growth achieved by Australia during the third quarter of the year ending.
Likewise, the unemployment rate in Australia rose last November, reaching its highest level in 18 months, and the volume of spending in the individual sector is witnessing a strong decline. In addition, the labor supply has witnessed an increase faster than the growth in the employment rate. This may put downward pressure on the country’s wage rate, which is one of the drivers of inflation in Australia, reducing the pressure facing the Reserve Bank of Australia to continue the monetary tightening cycle.
However, it cannot be said that the Australian economy may witness a recession (in the absence of a major economic shock) during the coming period, but rather that Australia may achieve economic growth, but below the trend.
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Important statements by the Governor of the Australian Reserve regarding the bank’s monetary policy
2024-01-02 11:27:13
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