The RBA once again holds off changing tack on interest rates, despite the headwinds from low wage growth, falling property prices and poor consumer sentiment buffeting the economy.
The Reserve Bank has given the Australian economy the benefit of the doubt, leaving interest rates on hold despite mounting evidence of a serious slowdown.The decision to hold was taken ahead of what is expected to be weak economic growth to be released by the Australian Bureau of Statistics tomorrow.
The central bank also adopted a neutral stance on rates, suggesting the next move was as likely to be down as up — a departure from its previously stated desire to raise rates. Weak partial data feeding into fourth quarter GDP numbers has led most market economists to slash their forecasts for growth to well below even the RBA's downgraded expectations.
"The central scenario is still for the Australian economy to grow by around 3 per cent this year," Dr Lowe said.
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