by
Elizabeth Moran | Oct 01, 2013
Statement
The following points are evident from the statement:
Global growth: Global growth comments were much the same as the prior meeting, where the RBA noted that;
Global growth is a bit below average this year, with reasonable prospects of a pick up next year. Commodity prices have declined from their peaks, but generally remain at high levels by historical standards. Inflation in most countries remains well contained.
Financial market developments: As being consistent with the prior statement, the RBA acknowledged the increased volatility in financial markets, as noted below;
Globally, financial conditions remain very accommodative Changes in the outlook for US monetary policy have increased volatility in financial markets, but long-term interest rates remain very low and there is ample funding available for creditworthy borrowers.
Domestic economic developments: Some acknowledgment that the economy was following a sub-trend growth pattern;
In Australia, the economy has been growing a bit below trend over the past year. This is expected to continue in the near term as the economy adjusts to lower levels of mining investment. The unemployment rate has edged higher. There has been an improvement in indicators of household and business sentiment recently, though it is too soon to judge how persistent this will be.
Inflation: Even though the currency had declined, the RBA remains fairly happy to re-affirm the prospects that inflation will remain at the medium-term target levels for the next few years, as the following assessment by RBA indicates;
Inflation has been consistent with the medium-term target. With growth in labour costs moderating, this is expected to remain the case over the next one to two years, even with the effects of the lower exchange rate.