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"The central scenario projects GDP growth of about 3½ percent on average over these two years, before slowing down in 2020 due to slower growth in resource exports," said Dr. Lowe. Previously, the RBA had stated that it expects growth "slightly higher" at 3% over these years.
"As the economy grows above the trend, the unemployment rate is expected to fall further to around 4¾ percent in 2020".
Previously, the RBA considered the unemployment rate of 5% as roughly equivalent to "full employment", but some economists believe it will be necessary to revise this estimate downwards.
Despite stronger growth prospects, Lowe said household consumption prospects remain a "source of lingering uncertainty".
"Household income growth remains weak, debt levels are high and some badet prices have fallen," he said.
The board concluded that the low rates supported the Australian economy and that the maintenance of interest rates was "consistent with sustainable growth of the economy and the attainment of the". inflation goal over time ", words identical to those of last month.
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The move came after last month's data revealed a tighter labor market, with the Australian unemployment rate dropping to 5 percent, its lowest level in seven years, a level the RBA had previously said was close to "full". employment".
The regular balance sheet of the RBA on the economy, which will be released this Friday, will reduce its long-term unemployment forecast from the previous level by 5.5%.
Despite this, wage growth remains stubbornly low and annual growth in the consumer price index rose from 2.1% to 1.9% last week, which is outside the target range. from 2 to 3% of the central bank.
Economists are also interested in falling real estate prices in Sydney and Melbourne, regardless of the impact on consumer confidence, which could dampen consumer spending.
Although the official interest rates set by the RBA have not changed since August 2016, when they were lowered, the rates applied by commercial banks increased during this period due to rising funding costs and the willingness of regulators to cool the housing market.
Tim Lawless, head of research at CoreLogic, said interest rates for real estate investors had risen by about 50 basis points since the last change of the RBA in 2016.
Most banks, with the exception of the National Australia Bank, also raised interest rates for homeowners by 10 to 15 basis points this year.
"Rising mortgage rates, especially for investors, who are now paying a premium of 55 basis points over homeowners, as well as tighter lending conditions, have been a key factor in easing mortgage rates. the burden of the housing market, "Lawless said.
Clancy Yeates writes on business specializing in financial services. Clancy is based in our Sydney newsroom.
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