Alexandra Heath, Head of Economic Analysis at the Reserve Bank of Australia
- Economy not as strong as we would like
- Australia has done quite well overall given the terms of trade cycle
- Unemployment lower than expected thanks to flexible labour market, subdued wages growth
- Says fall in AUD boosting net service exports, adding as much to GDP as resource exports
-
Heath, as it says above , is head of the Economic Analysis unit at the bank. What she is saying here is the sort of thing policy makers at the bank are being given, so its a good insight into what they are looking at, reading etc.
While I wouldn't call this analysis particularly exuberant on the Australian economy, its not a bearish take at all: economy done 'quite well', 'unemployment lower than expected ', effect of the lower AUD adding to GDP, resource exports also.
Measured, but optimistic I would say.
The next RBA policy meeting is December 1, the change is expected. Unless there is a shock event in the period leading up to the February meeting that'll be an 'on hold' decision also. Changes in RBA policy will not be a currency driver for some time to come.
-
Full text: The Terms of Trade: Outlook and Implications
Speech by Alexandra Heath, Head of Economic Analysis Department, at a Resources and Energy Workshop hosted by the Department of Industry, Innovation and Science, Canberra
-
AUD not showing much response, currently around 0.7190
