Lower rates benefit the economy: Swan

Federal Treasurer Wayne Swan says low interest rates have benefited both families and business. Source: AAP

FINANCIAL markets are holding out for one more interest rate cut this year by the central bank, which is looking for signs of expansion in the non-mining investment sectors of the economy.

The Reserve Bank of Australia (RBA) left the cash interest rate at three per cent for another month at its board meeting on Tuesday, as was widely expected.

Federal Treasurer Wayne Swan said the lower interest rates seen since 2011 were flowing through the economy and benefiting both families and business.

"Today's low interest rates will continue to support sectors under pressure from global headwinds, the high dollar and a cautious consumer," he said in a statement.

The RBA again indicated it could cut the cash rate later in the year to support domestic demand, given a benign inflation outlook.

"The peak in resource investment is drawing to a close," governor Glenn Stevens said in a statement.

"While the near-term outlook for investment outside of the resources sector is relatively subdued, a modest increase is likely to begin over the next year."

Australian Chamber of Commerce and Industry (ACCI) chief economist Greg Evans said any suggestion the RBA had finished cutting rates was premature given what was happening in the mainstream economy.

"Clearly the Reserve Bank wants to see this transition from the stronger parts of the economy to the weaker parts, and that's far from locked in," Mr Evans told reporters in Canberra.

"Any indication they have given about strength in the mainstream economy seem to be based more on hope than reality."

ACCI's latest business survey found lower interest rates and a more stable international economy were beginning to benefit businesses.

The March quarter survey of investor confidence found business owners believe conditions are favourable for the first time in two years.

The survey's index reading of 50.8 points, compared with 49.3 points in the December quarter, was above the 50-point mark separating growth from contraction.

But Mr Evans said businesses remained reluctant to invest, employ and borrow.

"We still think a rate reduction is justified between now and June," he said.

Similarly, manufacturing remains in the doldrums.

The Australian Industry Group's performance of manufacturing index fell 1.2 index points in March to 44.4 points, below the key 50 level.

"The strong dollar, falling selling prices, further cost pressures and the weakness of commercial and residential construction continue to take their toll," Ai Group chief executive Innes Willox said in a statement.

Opposition industry spokeswoman Sophie Mirabella said this was the thirteenth consecutive month of decline in activity.

"The job-destroying policies of this divided and dysfunctional Gillard Labor government are continuing to take a heavy toll on the Australian manufacturing sector," she said.

Meanwhile, house prices in capital cities, as measured by the RP Data-Rismark Home Value index, rose 1.3 per cent in March to stand 2.4 per cent higher than a year ago.

Over the March quarter, prices rose 2.8 per cent, the biggest quarterly rise since May 2010.

Anda sedang membaca artikel tentang

Lower rates benefit the economy: Swan

Dengan url

http://berisikgaduh.blogspot.com/2013/04/lower-rates-benefit-economy-swan.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

Lower rates benefit the economy: Swan

namun jangan lupa untuk meletakkan link

Lower rates benefit the economy: Swan

sebagai sumbernya