The Reserve Bank of Australia has claimed on Tuesday that Australia has started ‘rebalancing’ from the economic turmoil that it suffered from for decades due to booming mining investments and low inflation.
During an upbeat speech focused on the economic outlook, RBA Deputy Governor Philip Lowe said that the deterioration in the national income for the past years has kept the average real incomes less than what Australians received in 2008. The bettering national income will lead to the lessening of fall in commodity prices. According to Australia Financial Review, Lowe also mentioned some tough impacts on the public in his speech. He warned that the improvement in Australian economy would still prompt Aussies towards stricter budget and policy alternatives.
“There is no escaping the fact that future growth in the average income of Australians relies largely on our ability to lift our productivity,” Lowe said, while addressing the Urban Development Institute of Australia meeting held in Australia. “While the rebalancing and resilience of our economy is certainly something to welcome, the longer-term challenge is to lift our living standards through finding new things to do and better ways of doing what we currently do.”
“The need for this is made more pressing by the fact that the growth momentum in the global economy is less than it once was. We could expect that the drag on our national income from falling commodity prices will eventually lessen.”
The Sydney Morning Herald reported that the deputy governor mentioned the promising indicators including business surveys conducted from time to time as the main source of revealing the economic situation across the nation. He repeated the standard line “should that be appropriate in supporting demand,” which the RBA generally used while mentioning its decision of cutting a two percent cash rate during low inflation.
Lowe also focused on the convenience of policies offered by the foreign central banks of Europe, Japan, etc. and said that offering such ease was a “complication” as it intended to put significant pressure on the Australian dollar.