SMM News: may 7, Beijing time 12-30, the RBA announced this month's interest rate resolution, the latest Australian policy rate of 1.5%.
In the benchmark scenario, the RBA expects the country's economy to grow by 2.75 per cent in 2019 and 2020. Increased infrastructure investment and increased activity in the resources sector were the main drivers, saying this was partly in response to higher export prices in Australia.
Previously, Wall Street had unanimously expected it to be the closest meeting to a rate cut since the RBA cut interest rates in August 2016, with Bloomberg expecting a rate cut of 25 basis points to 125%. The pressure may come from Australia's more severe inflation weakness, as well as falling house prices there.
The RBA said there was still spare capacity in the economy and that further improvements in the labour market might be needed to keep inflation in line with its target. In the future, the central bank will pay close attention to the development of the labor market.
Economic fundamentals: unemployment has not improved and inflation is significantly lower than expected
The RBA said the Australian labour market remained strong, but the unemployment rate had not fallen significantly.
There has been a significant increase in employment, but the vacancy rate remains high and there is a shortage of skills in some areas.
Despite the positive performance in these areas, little progress has been made in reducing unemployment in the past six months. The unemployment rate will remain roughly around 5 per cent in the coming year and fall slightly to 4.75 per cent in 2021.
The strong job growth over the past year or so has led to a rebound in wage growth, which is a welcome development. Although this may be a gradual process, wages are expected to rise further.
At the same time, the RBA pointed out that the main uncertainties in the country are still in the household consumption outlook, due to long-term low income growth and falling house prices, Australian household consumption is low. Retail sales in Australia were the worst in seven years in the first quarter, with falling household goods consumption being a major drag, according to data released earlier today.
However, the RBA believes that as wages rise, the growth of household disposable income is expected to pick up to some extent, which should support consumption in the future.
On the inflation front, the RBA said most parts of the economy were facing "moderate inflationary pressures", with inflation of 1.3 per cent over the past year, driven by a weak housing market and a range of price policies. It is 1.6 per cent below the benchmark inflation rate.
The RBA expects inflation to pick up only gradually in the future, with a potential inflation rate of 1.75 per cent this year, although real inflation is likely to reach 2 per cent due to rising gasoline prices, which will also be around 2 per cent in 2020.
Weak demand for credit in the housing market makes it difficult to pick up
The sharp fall in house prices has become Australia's worst crisis, with the housing construction industry contracting at its fastest pace in six and a half years. What used to be the "fiercest" property market in the world is on the verge of collapse.
The problem with the housing market is that rent increases are still low and investor demand for real estate credit has slowed significantly, the RBA said. Borrowers of high credit quality face fierce competition, which depresses interest rates on home mortgages.
In order to curb the "speculation" of overseas buyers, the Australian government has frequently introduced restrictions, which directly contributed to the collapse of Australian house prices by more than 17% from their peak.
The Australian dollar jumped 50 points against the dollar after the interest rate decision was announced.
In the process of updating.