RBA highlights risk of deeper coronavirus recession, but the Government can avert it
4 years, 7 months ago

RBA highlights risk of deeper coronavirus recession, but the Government can avert it

ABC  

In the helter-skelter world of news, it's often hard to remember what you covered last week. It turns out Australia didn't sink as deeply into this bog as the RBA had originally feared — rather than the 8 per cent fall forecast in early May, the bank now expects Australia's economy to have shrunk just 6 per cent over the year to June 30. Dr Ellis says this downside scenario also assumes that Australia's borders remain shut to short-term visitors until the end of next year, as opposed to the middle of next year under the baseline case. Under this scenario, the economy doesn't even get back to where it was pre-pandemic by the end of the forecast period and unemployment peaks well above 10 per cent at the end of this year and is still close to 9 per cent two years later. But, as the Commonwealth Bank's head of Australian economics Gareth Aird summed it up in a note on the RBA's forecasts: "The deficit will now exceed 10 per cent of GDP in 2020/21.

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History of this topic

RBA Is More Confident on CPI, But Too Early to Declare Victory
3 months ago

RBA Is More Confident on CPI, But Too Early to Declare Victory

Live Mint  

-- Australia’s central bank is more confident that inflation is moving sustainably toward target but it’s still too soon to conclude the battle is won given a recent pick-up in consumption and a still-tight labor market, minutes of the December meeting showed. The Reserve Bank’s board discussed scenarios in which future policy would be eased to boost economic growth or …

The RBA has avoided the worst-case scenario with interest rates but economic uncertainty is looming
7 months, 2 weeks ago

The RBA has avoided the worst-case scenario with interest rates but economic uncertainty is looming

ABC  

That's the thing with silver linings. Here's how it happened Even with the carnage of the past few days, our market is only off 1.5 per cent since the start of the financial year, while some US indices are still in the black, giving an indication of just how fast stock markets have been running in recent weeks. Annual inflation …

RBA Financial Stability Review says Australia's banks safe even as up to 85,000 borrowers risk running out of cash
1 year ago

RBA Financial Stability Review says Australia's banks safe even as up to 85,000 borrowers risk running out of cash

ABC  

In short: Around 5 per cent of mortgage borrowers currently spend more than they earn on essentials and their mortgage, and more than 2 per cent could run out of savings by the end of next year. Around 5 per cent of mortgage borrowers currently spend more than they earn on essentials and their mortgage, and more than 2 per …

RBA leaves door open to interest rate cuts and rises as unemployment risks rise
1 year ago

RBA leaves door open to interest rate cuts and rises as unemployment risks rise

ABC  

What a difference six weeks makes. Economists and traders expect the US Federal Reserve to lead off a global round of interest rate cuts, but recent economic data suggests the RBA should beat them to it. CBA's head of Australian economics Gareth Aird points out that the RBA board made seven references to "uncertainty" in its one-page post-meeting statement, up …

Did the Reserve Bank hit the brakes too hard? Why Australia's economy is heading into reverse
1 year ago

Did the Reserve Bank hit the brakes too hard? Why Australia's economy is heading into reverse

ABC  

The softening-up process is already underway. There's now every possibility the GDP numbers could tip negative, giving the first real indication that Australia's economy is shrinking under the weight of 13 interest rate hikes in quick succession. The RBA lifted the cash rate to 4.35 per cent last November, but it hasn't fully flowed through to the whole economy. Prepare …

Australia narrowly avoided recession this year — what these experts think will happen in 2024
1 year, 2 months ago

Australia narrowly avoided recession this year — what these experts think will happen in 2024

ABC  

Fears that Australia would enter a technical recession during 2023 didn't eventuate. "I think the last interest rate hike in November has led to a bit of a perhaps change in expectation that maybe we haven't seen the peak in interest rates in Australia," AMP's deputy chief economist Diana Mousina said. "I'll be the first to say that we were …

Australia's economic crisis will be front and centre as 2023 ends. But whether 2024 will be more prosperous remains to be seen
1 year, 3 months ago

Australia's economic crisis will be front and centre as 2023 ends. But whether 2024 will be more prosperous remains to be seen

ABC  

It's been a year, hasn't it? That inflation struggle will be front and centre as this year ends and the new year begins, keeping the Reserve Bank back in the national economic driver's seat for another year. Unemployment rises despite another surprise job creation surge Photo shows A female bartender smiles at a colleague cutting lemons as she shakes up …

A rising number of households on the cusp of financial stress, but RBA says banking system isn't at risk
1 year, 5 months ago

A rising number of households on the cusp of financial stress, but RBA says banking system isn't at risk

ABC  

Australian homes and businesses are vulnerable to financial stability risks as rising inflation and interest rates continue to pressure the global economy. Key points: Australia's financial system is well-placed to deal with global economic shocks The share of households falling behind on their mortgage payments has picked up a little Despite rising rates, the vast majority of households are servicing …

RBA delivers 'massive' interest rate hit to millions of Australians already struggling with overwhelming cost pressures
1 year, 10 months ago

RBA delivers 'massive' interest rate hit to millions of Australians already struggling with overwhelming cost pressures

ABC  

It was designed to shock, and it did just that. On Tuesday, the Reserve Bank of Australia increased its cash rate target — after a month's pause — by 0.25 percentage points, to 3.85 per cent. "Don't forget that the RBA estimates that 15 per cent of variable rate borrowers will move into negative cash flow by year's end if …

Federal Reserve hikes interest rates but gives RBA room to pause
2 years ago

Federal Reserve hikes interest rates but gives RBA room to pause

ABC  

Never waste a crisis. "We did consider that in the days running up to the meeting," Powell told reporters in a press conference after today's rate rise decision, referring to a period where the banking crisis threatened to spiral out of control. But Powell was keen to maintain a link between the US banking crisis and inflation when explaining why …

RBA deputy governor Michele Bullock says outlook for global economy is 'quite worrying'
2 years, 6 months ago

RBA deputy governor Michele Bullock says outlook for global economy is 'quite worrying'

ABC  

The outlook for the global economy is "quite worrying" and it has implications for Australia, a Reserve Bank official has warned. Key points: The RBA says its emergency bond-buying program broadly achieved its aims Deputy governor Michele Bullock says there are problems in the global economy that could threaten Australia's recovery The RBA's ability to create money supported the economy …

Why the Reserve Bank and the federal government don't see eye to eye on Australia's coronavirus recovery
4 years ago

Why the Reserve Bank and the federal government don't see eye to eye on Australia's coronavirus recovery

ABC  

These are unusual times. As the federal government is adamant that stimulus needs to be wound back, to allow the private sector to take over in the recovery, the Reserve Bank is doubling down, arguing that it will be years before Australia can wean itself off the emergency interest rates that have sunk to zero. Responsible lending not responsible Ever …

RBA boss Philip Lowe says household spending holds the key to post-COVID economic recovery
4 years, 1 month ago

RBA boss Philip Lowe says household spending holds the key to post-COVID economic recovery

ABC  

Australia has emerged from the first year of the COVID-19 crisis in much better shape than expected. Speaking at the National Press Club in Canberra, Reserve Bank governor Philip Lowe said the key economic indicator of unemployment was performing better than even the RBA's most optimistic predictions. "In our upside scenario, the unemployment rate was expected to end 2020 a …

House prices to bounce back in 2021 after modest falls during coronavirus pandemic, CBA predicts
4 years, 6 months ago

House prices to bounce back in 2021 after modest falls during coronavirus pandemic, CBA predicts

ABC  

Australia's biggest home lender says house price falls so far during the pandemic have been surprisingly small, and its internal modelling is predicting a quick rebound everywhere except Melbourne. Key points: CBA is now forecasting a 6 per cent fall in capital city property prices due to COVID-19, down from 10 per cent initially But the bank warns that Melbourne …

RBA keeps interest rates at 0.25pc as Victoria struggles to contain coronavirus outbreak
4 years, 7 months ago

RBA keeps interest rates at 0.25pc as Victoria struggles to contain coronavirus outbreak

ABC  

Australia's official interest rate has been kept at an historic low of 0.25 per cent. Key points: The RBA kept interest rates on hold at a record low 0.25 per cent The Reserve Bank said it will buy Government bonds tomorrow to keep their interest rates down within its target CBA has downgraded its economic forecasts and said there was …

RBA boss Philip Lowe says Australia's economy has 'turned the corner', but Government has more to do
4 years, 8 months ago

RBA boss Philip Lowe says Australia's economy has 'turned the corner', but Government has more to do

ABC  

The Reserve Bank governor says Australia's economy has passed its low point but faces a "bumpy path ahead", with the Federal Government best placed to support the recovery. Key points: Philip Lowe says the jobs market appears to have reached its trough, but there will be "bumps" as previously resilient sectors run out of work Government borrowing costs are the …

Victoria's coronavirus lockdown won't help an economy that's being held hostage by a pandemic
4 years, 8 months ago

Victoria's coronavirus lockdown won't help an economy that's being held hostage by a pandemic

ABC  

The fate of the economy, at least as far as the eye can see, has been resting on how well the authorities can control the spread of coronavirus. He says the current unemployment rate is actually more like 11.5 per cent, despite Australian Bureau of Statistics figures showing the "headline" rate is a fraction over 7 per cent. "I think …

Underemployment the key symptom of the coronavirus recession
4 years, 9 months ago

Underemployment the key symptom of the coronavirus recession

ABC  

Anna Ludvik unloads equipment from the back of a ute as her partner, Jeremy Sims, runs through a verbal checklist. Add to the officially jobless the 700,000 people still "employed" on JobKeeper but with zero work, an unprecedented number who've had their work hours cut down, and half-a-million people who've dropped out of the labour force altogether, and you get …

The coronavirus recession is like no other — and it risks becoming a chronic problem
4 years, 9 months ago

The coronavirus recession is like no other — and it risks becoming a chronic problem

ABC  

Forget what you know about recessions, this one is very different — and it may be chronic. That's not to say we're about to experience years of economic contraction or "negative growth" as economists like to say, but it's going to remain tough going for many Australians for years. This is the combination of two overbearing forces: an economy built …

Coronavirus will send WA economy into a recession for 2020–21, Treasurer Ben Wyatt confirms
4 years, 9 months ago

Coronavirus will send WA economy into a recession for 2020–21, Treasurer Ben Wyatt confirms

ABC  

Western Australia's Treasury expects coronavirus to send the state's economy into recession, with a contraction of 3.1 per cent predicted in the 2020–21 financial year as the economy takes a $12 billion hit. Key points: The economy is set to grow 0.7 per cent this financial year before contracting The economy is set to grow 0.7 per cent this financial …

Prime Minister Scott Morrison to warn of hard economic recovery post-coronavirus
4 years, 9 months ago

Prime Minister Scott Morrison to warn of hard economic recovery post-coronavirus

ABC  

An overhaul of vocational education focused on tradies and skilled workers will be at the centre of Government efforts to lead the Australian economy "out of ICU" following the COVID-19 crisis. Key points: Scott Morrison will use an address to the National Press Club to warn Australia faces grim times post-COVID-19 Scott Morrison will use an address to the National …

CBA warns Australia risks 32 per cent house price crash in a 'prolonged downturn', flags $1.5 billion coronavirus-hit to bank
4 years, 10 months ago

CBA warns Australia risks 32 per cent house price crash in a 'prolonged downturn', flags $1.5 billion coronavirus-hit to bank

ABC  

Australia's biggest home lender is warning Australian house prices could tumble by a third if coronavirus leads to a "prolonged downturn" and extended period of high unemployment. Key points: CBA announces an unaudited profit of $1.3b for the first three months of 2020 The bank is setting aside $1.5b for potential coronavirus-related losses, bringing total credit provisions to $6.4b CBA …

Quick bounce back unlikely for Australian economy post-coronavirus despite political optimism
4 years, 10 months ago

Quick bounce back unlikely for Australian economy post-coronavirus despite political optimism

ABC  

When will the penny drop? On Friday, the Reserve Bank forecast unemployment would hit 10 per cent this year and remain high until the end of next year. Our $214 billion may seem small in comparison but our direct financial injection when measured against GDP, was 10.6 per cent of our economy. If the Reserve Bank's projections are correct, and …

Australia faces recession even as it prepares to reopen economy
4 years, 10 months ago

Australia faces recession even as it prepares to reopen economy

Al Jazeera  

Australia’s central bank has predicted that the country is facing its biggest economic contraction on record and says it is committed to supporting jobs and incomes as the government announces plans to relax pandemic-related restrictions by July. Indeed, Australia’s banks have deferred payments on at least 200 billion Australian dollars in loans, reflecting the financial pain felt by businesses and …

As coronavirus drives down the economy, how does it compare to the last recession?
4 years, 11 months ago

As coronavirus drives down the economy, how does it compare to the last recession?

ABC  

It's close to 30 years since Australia last had a recession. Stay up-to-date on the coronavirus outbreak Download the ABC News app and subscribe to our range of news alerts for the latest on how the pandemic is impacting the world For a property-price obsessed nation, it's worth noting that house prices crashed, too, through a combination of high interest …

Australia unlikely to experience 'post-war' recovery after coronavirus
4 years, 11 months ago

Australia unlikely to experience 'post-war' recovery after coronavirus

ABC  

So far, so good. According to research by consultancy firm AlphaBeta — run by Andrew Charlton, Kevin Rudd's adviser through the global financial crisis — the stimulus program has already arrested the alarming decline in discretionary spending that rocked the economy during the last week of March. Spending per person plummeted an incredible 13 per cent below normal levels in …

ASX surges as Reserve Bank warns of 'sharp contraction' from coronavirus
4 years, 11 months ago

ASX surges as Reserve Bank warns of 'sharp contraction' from coronavirus

ABC  

Australian shares jumped this session, beginning what is likely to be another volatile month. Stay up-to-date on the coronavirus outbreak Download the ABC News app and subscribe to our range of news alerts for the latest on how the pandemic is impacting the world Recession and surging unemployment The Reserve Bank, meanwhile, has published the minutes of its emergency mid-March …

Coronavirus downturn has been rapid and sharp, says former Fed head Janet Yellen
4 years, 11 months ago

Coronavirus downturn has been rapid and sharp, says former Fed head Janet Yellen

Firstpost  

Talking of the employment sector, Yellen said she was expecting higher percentages of unemployment due to the coronavirus outbreak. Former US Federal Reserve chairperson Janet Yellen has said the economic downturn due to the coronavirus pandemic has been “rapid and sharp” and is “different” than any the country has faced. Speaking at an online seminar hosted by the Brookings Institution, …

Analysts believe banks can withstand coronavirus shock but high debt levels leave few buffers
4 years, 11 months ago

Analysts believe banks can withstand coronavirus shock but high debt levels leave few buffers

ABC  

It's the sharpest and swiftest economic downturn anyone alive has seen — a sudden shutdown of large swathes of the economy, with a property price crash looming, businesses collapsing and jobless rates forecast to hit levels akin to the Great Depression. Key points: Analyst Brian Johnson says Australian banks are holding more cash than they used to The Reserve Bank …

The coronavirus' economic fallout has its own momentum as RBA makes extraordinary intervention
5 years ago

The coronavirus' economic fallout has its own momentum as RBA makes extraordinary intervention

ABC  

The Reserve Bank is trying to stop the financial system melting down. 'Extraordinary and challenging times' Yesterday's extraordinary intervention from the Reserve Bank saw the official interest rate lowered to 0.25 per cent, to a level never seen in Australia's history. The RBA will keep the interest rate at 0.25 per cent for years, until it is confident that the …

RBA slashes interest rates to 0.25pc in emergency cut amid coronavirus pandemic
5 years ago

RBA slashes interest rates to 0.25pc in emergency cut amid coronavirus pandemic

ABC  

The Reserve Bank has cut interest rates to a record low 0.25 per cent and announced extraordinary measures to help prevent a coronavirus-driven recession. Key points: Australia's economy continues to deteriorate as panicked investors wipe billions of dollars of value off local stock market The RBA will buy Australian government bonds as part of its first-ever quantitative easing program The …

Coronavirus to leave Australian economy in the doldrums for some time, says Reserve Bank
5 years ago

Coronavirus to leave Australian economy in the doldrums for some time, says Reserve Bank

ABC  

A swift economic recovery from the coronavirus outbreak is "very unlikely" and the pandemic will have a "significant effect" on Australia's national finances, according to the Reserve Bank. Key points: Minutes show the RBA does not know when the economy will recover But it believes Australia will benefit from a Chinese growth rebound later this year The bank is prepared …

Coronavirus fallout could take Australian economy decade to recover from, KPMG says
5 years ago

Coronavirus fallout could take Australian economy decade to recover from, KPMG says

ABC  

Australia's economy could take almost a decade to recover from the coronavirus fallout even after being cushioned by the Federal Government's $17.6 billion stimulus, according to a report out this morning. Key points: KPMG said in the best case scenario, Australia's economic growth would decline by 0.9 per cent in 2020 This, even with the Federal Government's stimulus measures, amounts …

Coronavirus has heightened 'risk aversion and uncertainty' but economy will hold up, says RBA deputy governor Guy Debelle
5 years ago

Coronavirus has heightened 'risk aversion and uncertainty' but economy will hold up, says RBA deputy governor Guy Debelle

ABC  

Coronavirus will have a negative impact on the economy, Reserve Bank deputy governor Guy Debelle says, but lower interest rates as well as the Federal Government's pending stimulus package will cushion the blow and Australia will bounce back quickly once the virus is contained. Key points: The RBA expects 0.5 percentage points will be wiped off growth in the March …

Coronavirus could trigger global recession: Rabobank
5 years ago

Coronavirus could trigger global recession: Rabobank

NL Times  

If the new coronavirus Covid-19 turns into a global pandemic, economists at Rabobank foresee an economic recession in large parts of the world, including the Netherlands, Germany, Japan, Italy, and the United States. "This economic crisis could become even worse if it turned into a financial crisis, for example when the number of bankruptcies increase sharply worldwide," the Rabobank economists …

Coronavirus may be the threat, but the uncertainty it's creating could really cost the economy
5 years ago

Coronavirus may be the threat, but the uncertainty it's creating could really cost the economy

ABC  

It's time to worry. Lowe says it's too early to say, but economists warn much of the economic damage that has already occurred won't show up in the national statistics until the June quarter data. If Australia's economy contracts in the March and June quarters, it will record two consecutive quarters of negative growth — a technical recession. Wasn't the …

Who will save the world from a coronavirus recession?
5 years ago

Who will save the world from a coronavirus recession?

Al Jazeera  

Why a shock US central bank rate cut may not be enough to save the global economy from the coronavirus outbreak. Growth could halve this year to 1.5 percent, the OECD warned in its worst-case scenario for the outbreak, a growth rate generally considered to indicate a recession. Rajiv Biswaz, executive director and Asia-Pacific Chief Economist at IHS Markit, adds …

Coronavirus Spreads Recession Fears Around The World
5 years ago

Coronavirus Spreads Recession Fears Around The World

NPR  

Coronavirus Spreads Recession Fears Around The World Enlarge this image toggle caption Nicolas Asfouri/AFP via Getty Images Nicolas Asfouri/AFP via Getty Images Updated at 4:10 p.m. Sponsor Message But in a global economy, even countries that have been relatively unscathed by the virus so far, such as the United States, face growing risks from the "still-evolving corrosive shock from the …

RBA interest rate cuts won't save the economy from coronavirus, but there are policies that may
5 years ago

RBA interest rate cuts won't save the economy from coronavirus, but there are policies that may

ABC  

An interest rate cut might be a bonus for homeowners with mortgages and give share investors a temporary sugar hit, but it's not going to do much to save the economy from coronavirus. Rate cuts can't stop coronavirus disruptions If a rate cut won't do much to help with the demand shock, it'll do virtually nothing to ameliorate the supply …

Government's economic plan for coronavirus to be announced ahead of May Budget
5 years ago

Government's economic plan for coronavirus to be announced ahead of May Budget

ABC  

The Federal Government's plan to shield the economy from the coronavirus fallout will be announced ahead of the May Budget, the Prime Minister has confirmed. Key points: The plan has been kept under wraps, but Mr Morrison says the details will be revealed in the next two months Mr Morrison refused to answer questions about whether the coronavirus outbreak and …

Coronavirus isn't the only contributor to Australia's weakening dollar
5 years ago

Coronavirus isn't the only contributor to Australia's weakening dollar

ABC  

Australia's dollar fell to an 11-year low this week, hitting 65.43 US cents on Thursday. The decline began after Reserve Bank governor Philip Lowe delivered a speech in Sydney conceding Australia's economy had weakened towards the end of 2018 and more interest rate cuts may be needed in 2019. The RBA ended up cutting Australia's interest rate three times last …

Coronavirus fails to dampen optimism of global share markets
5 years, 1 month ago

Coronavirus fails to dampen optimism of global share markets

ABC  

The death toll may be rising, and more people in more countries are being infected, but for now at least, share markets are looking past coronavirus to a bright 2020. Key points: Markets are coming back to life after getting to grips with the spread of coronavirus The US and China are pumping money into their economies The risk of …

Economic growth being killed by consumer, business spending 'strike'
5 years, 3 months ago

Economic growth being killed by consumer, business spending 'strike'

ABC  

Australians are hurting the economy by not spending, with household savings soaring as consumer spending plummets to its lowest level since the global financial crisis. Key points: GDP growth stepped down from 0.6pc over the quarter to 0.4pc Households appear to saving rather than spending their tax returns, as savings rose while discretionary spending saw its weakest growth since the …

Gentle turning point or a turn for the worse? RBA mulls over jobs disappointment
5 years, 4 months ago

Gentle turning point or a turn for the worse? RBA mulls over jobs disappointment

ABC  

Has the Reserve Bank's much hoped for "gentle turning point" become a "turn for the worse"? That would sit comfortably with RBA's commitment "to expect that an extended period of low interest rates will be required" while it could also lift core inflation by 0.2 percentage points on JP Morgan's modelling. "Central banks have turned the liquidity taps back on …

Will a lower dollar bail out the economy, raise wages and lower unemployment? The RBA is hoping so
5 years, 4 months ago

Will a lower dollar bail out the economy, raise wages and lower unemployment? The RBA is hoping so

ABC  

Putting together the latest quarterly update on the Australian economy could hardly have been a fun job for the Reserve Bank. Key points: Wages and jobless data this week are expected to back-up the RBA's bleak view of both The RBA says a 5 per cent fall in the $A will help boost wages, push inflation into its target band …

Reserve Bank may cut interest rates again despite housing bubble risks
5 years, 5 months ago

Reserve Bank may cut interest rates again despite housing bubble risks

ABC  

The Reserve Bank has signalled that further cuts to official interest rates remain a live option despite the risk of refuelling a property bubble in Sydney and Melbourne. Key points: The Reserve Bank has slashed interest rates three times since June Markets have priced in a 59pc chance of a rate cut in November RBA could review its plans to …

RBA keeps interest rates on hold, giving a cooling economy the benefit of the doubt
6 years ago

RBA keeps interest rates on hold, giving a cooling economy the benefit of the doubt

ABC  

The Reserve Bank has given the Australian economy the benefit of the doubt, leaving interest rates on hold despite mounting evidence of a serious slowdown. Key points: RBA maintains the economy is strong, supported by business investment and government spending Reiterates its forecast for 3pc growth this year Main risks to the economy are weak household income and falling house …

Is the Reserve Bank's glass about to become half-empty?
6 years, 1 month ago

Is the Reserve Bank's glass about to become half-empty?

ABC  

In July last year, the Reserve Bank slipped an important phrase into its board meeting minutes, informing all and sundry "the next move in the cash rate would more likely be an increase than a decrease". This week in finance: Banking and financial services royal commission report tabled RBA rates meeting and Statement on Monetary Policy Company results season starts …

RBA edges down growth outlook, sees gradual inflation rise
7 years, 4 months ago

RBA edges down growth outlook, sees gradual inflation rise

ABC  

The Reserve Bank has slightly downgraded it outlook for economic growth in Australia while signalling only a gradual rise in headline inflation. Key points: Low wage growth remains a concern for the RBA GDP growth and inflation for the end of 2018 downgraded a notch RBA remains optimistic China and construction will support growth In its quarterly statement on monetary …

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