WEATThe Pacific Oceanbank(Westpac) studyAnalystBill Evans points out that the Reserve Bank of Australia maintainsinterest rateUnchanged, but raised expectations for Australia's economic growth and lowered expectations for unemployment.
Huixin reminded that, as expected, the Reserve Bank of Australia's board of directors decided to maintain 1.5% of cashinterest rateconstant.
The familiar topics in previous speeches have been repeated this time: continuing global expansion; the Chinese economy has slowed down a bit;international tradeUncertainty; positive business environment; household consumption is the source of uncertainty; labor market outlook is optimistic; wage growth is sluggish; but wage growth is expected to rise gradually; unemployment rate is expected to decline further; inflation in 2019 and 2020 Rates will rise further; housing conditions in Sydney and Melbourne continue to improve; progress towards full employment and targeted inflation will be gradual.
Huixin prompted, however, economic growthLong andThe unemployment forecast has been corrected. These forecasts will be confirmed in the monetary policy statement issued on November 9. The growth rates for 2018 and 2019 are forecast to have been revised upwards from 3.25% to 3.5%, while the economy is forecast to slow down in 2020, although the current forecast of 3% growth may be revised to 3.25%. Since there is no real change in wording, there is no clear reason to correct it upwards, especially in 2019.
As mentioned earlier, we are a bit surprised that the central bank has decided to cancel the 3.25% economic growth forecast for 2019 (higher than the potential growth rate estimate of 0.75%).WestpacIt is expected that economic growth will slow down to 2.7% in 2019 (approximately within the potential range). We will have to wait until the November 9 monetary policy statement to explain the reasons behind this.
Obviously, the central bank is not so worried about the disadvantages we mentioned above. As always, although the policy is forward-looking, it responds to reality rather than long-term forecasts. We expect that by 2019, the central bank will be surprised by the Australian economic slowdown and adjust its outlook accordingly. Therefore, we are still satisfied with our prediction that the cash rate will remain unchanged in 2019 or even 2020.
(Article source: FXStreet)