Australia’s central bank has turned more upbeat on the economic outlook, citing an improving labour market, stronger public investment and a pick up in household consumption.
Yet minutes of the Reserve Bank of Australia’s (RBA) July meeting showed policy makers remained watchful on risks to jobs and housing, suggesting they were in no hurry to lift interest
rates anytime soon.
The mood was clearly brighter, with the word “positive” appearing repeatedly in the five-page statement.
One new development was an upturn in fiscal spending which was now expected to be stronger in 2017/18 than previously expected, mainly thanks to public infrastructure.
“Members noted that infrastructure investment was expected to have significant positive spillovers to other parts of the economy,” the minutes showed.
A run of strong jobs reports were also encouraging. “Members noted that the strength of recent labour market data had removed some of the downside risk in the bank’s forecast of wage growth.”