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Reserve forecasts robust upswing for Australia; 'reasonable growth' for global economy

21-Sep-2010 7:35 AM

Reserve Bank of Australia Governor, Glenn Stevens, forecast overall growth in 2011 will increase to "something above trend" adding that the global economy will likely "record reasonable growth" over the coming year, benefiting exports from Australia (Bloomberg, 20-Sep-2010).

Reserve Bank of Australia: “If downside possibilities do not materialise, the task ahead is likely to be one of managing a fairly robust upswing. Part of that task will, clearly, fall to monetary policy ... Even with continued caution by households, that probably means that overall growth, which has been at about trend over the past year, will increase in 2011 to something above trend. We think that means that the fall in inflation over the past two years won’t go much further ... We expect that this high level of relative export prices will add to incomes and spending, even as the stimulative effects of earlier low interest rates and budgetary measures continue to unwind ... We expect, and indications from businesses are that they do as well, that resource sector investment will rise further – as we experience the largest minerals and energy boom since the late 19th century,” Glenn Stevens, Governor. Source: Bloomberg, 20-Sep-2010.