The Reserve Bank of Australia, on Tuesday, decided not to change interest rates and maintain 1%.
The Reserve Bank of Australia at its monthly monetary policy meeting pointed to a rational outlook for the world economy. However, it believes that the global economy is at risk due to the expansion of countries' trade disputes. The Reserve Bank Statement also states:
In advanced economies, we see a decline in unemployment, rising incomes and lower inflation.
The decline in world trade also results in slower growth in Asia.
The global financial conditions are at a good level. But the downside risks have led to the actions of the world's central banks and lower interest rates this year.
Governments bond yields have declined and are at their lowest levels in most countries, including Australia. The Australian dollar has recently been at its lowest level.
But Australia's growth outlook is good and we expect a 2 ½ percent growth this year and a 2 ¾ percent growth in 2020.
Employment and labor force participation rates have increased in recent years. The employment rate is expected to grow about 5% over the next two years.
The main scenario for inflation is its gradual increase, but we need more time to return to 2% inflation. We expect inflation to be slightly below 2% in 2020 and slightly above 2% in 2021.
For Australia to succeed in reducing unemployment and achieving targeted inflation, it must spend a long period at low interest rates.