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The Reserve Bank (RBA) board is meeting this morning to decide whether the Australian economy needs a further stimulus in the form of an interest-rate cut. The Bank's decision will be known tomorrow morning, approximately three hours prior to the official release of Australian Bureau of Statistics data revealing whether Australia is in a technical recession. Following the surprise release of negative growth GDP figures for the December quarter, along with other data showing a slowing economy, the RBA made four cuts in interest rates this year. Analysts generally agree the RBA will retain the official cash rate at 5%, set at the May meeting, and that GDP will grow by a negligible few points of a percent, perhaps 0.4% to 0.7% - thus avoiding the technical recession of two quarters of negative growth. Yesterday's inventory figures were enough to revise downward the expected GDP figure, and thus increase the odds of a further cut tomorrow. All the data will be available on bizreview by midday tomorrow.
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Thursday, February 09, 2012