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Australian Economy- Central Bank updates and Economic performance for Q2

One of the important economic centers in the southern hemisphere, Australia is said to be one of the important centers for trade and international relations. Consider the field of business and education, the nation has enriched the lives of many across the globe. Some of the major trading partners of the country include the United States of America, China, India, Japan South Korea, Germany, Thailand, and the United Kingdom to name the prominent ones.


Economic performance in Q2- 2024

Like many of the economies across the world where consumption is said to be weak, it is the same case with the Australian market as well. The growth in GDP is said to be at 0.2 percent which is considered to be one of the weaker trends observed in the second quarter of this year. Most of the growth is said to be driven by the public sectors of the economy and the contribution by the private players is said to be a lot weaker in term. There are said to be higher elevated labor costs in the market which is also driven by inflationary pressures. The increased wages (nominal wages) increase in the market (close to 1 percent), and the consumption is said to be reduced. The need to ease the wage pressure in the Australian economy is the need, of the hour to promote growth. The most important issue for the Reserve Bank of Australia (RBA) continues to be inflation, like any other nation today.  


Recent decisions from the central bank

The RBA is still of the opinion that their inflation remains above their target range in the recent meeting in September. As per important sources, inflation is most likely not to return to low levels until 2026. The policy rates were held at 4.35 percent and continue to be held on until the inflation targets are met. Inflation remains sticky according to the central bank chief  Michelle Bullock, and continues to state that they will strive to reach within the 2 to 3 percent range. This will support the growth in the employment levels in the nation in the process. The central bank is in no hurry to go into an easing mode for its policy rates, despite the surprise position of a 50-bps cut taken by the U.S Federal Reserve.

The employment levels are said to have improved, with vacancies and labor participation at an all-time high. Despite all this, the consumption expenditure is said to remain weak. Many households are struggling to pay back their loans in Australia. Exports are said to have fallen since there is a significant downside which does not give a positive incentive from the global outlook. Most of the threat is said to be coming from the inflation side considering the core inflation which is said to be relatively high. The RBA chief and its members believe that the inflation would come within the target range despite their restrictive policies. Though they did reiterate that they would rely on the incoming data on the economic indicators and take a decision on the easing of their policies as well the situation seems fit. The Australian economy can only hope for some good news in the last two meetings in November and December. Based on the data flowing into the Central Bank, there is some hope and respite for the household and business houses.

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