Invest
RBA tipped to keep interest rates low until the end of 2022
Economists are predicting interest rates will remain low for a few years, as the RBA prepares to make its first cash rate announcement of the year on Tuesday.
RBA tipped to keep interest rates low until the end of 2022
Economists are predicting interest rates will remain low for a few years, as the RBA prepares to make its first cash rate announcement of the year on Tuesday.
Shane Oliver, chief economist at AMP Capital, expects the Reserve Bank of Australia to keep rates on hold at a record low 0.1 of a percentage point at its first rate meeting of 2021.
According to Mr Oliver, this decision will leave mortgage rates at record lows, which, along with government home buyer incentives and economic recovery, will continue to push average property prices higher.
“Headline inflation will rise due to base effects as the collapse in petrol prices and childcare costs drops out of annual comparisons, but underlying inflation will remain low at around 1.5 per cent or less out to next year.
“This in turn will see the RBA leave rates at 0.1 per cent probably out to end 2022 at least,” Mr Oliver said.
Similarly, CreditorWatch foresees an equal scenario.
According to Harley Dale, chief economist at CreditorWatch, with the RBA using up its ammunition late in 2020, the focus this year will be firmly on federal and state fiscal policy to complement super-low borrowing rates and keep the Australian economic recovery on track.
“In terms of all the policies that the RBA has in place, the Central Bank will be closely keeping an eye on early 2021 economic updates for key sectors such as retail,” Mr Dale said.
“In his National Press Club address yesterday, the Prime Minister reinforced and outlined a raft of policies, including tax cuts for small and medium-sized enterprises (SMEs). Such policies are in play against a backdrop of metrics – such as Australia’s unemployment rate – being in much better shape than many feared through much of last year,” he opined.
Mr Dale further added that the SME sector will be a key barometer of Australia’s economic recovery in 2021.
“CreditorWatch data from a range of industries will continue to provide crucial updates as to how the business and economic landscape for SMEs is faring in the lead-up to, and necessary conclusion of, the JobKeeper program,” he concluded.
RELATED ARTICLES
About the author
About the author
Economy
Inflation dip welcomed, but employers remain cautious, says JobAdder CEO
As the Australian Bureau of Statistics (ABS) released its latest Consumer Price Index (CPI) figures today, revealing a dip in inflation, industry leaders are cautiously optimistic. However, this ...Read more
Economy
Inflation eases slightly as fuel prices drop, but other pressures remain
Australia's inflation landscape experienced a slight reprieve in April, according to the latest Consumer Price Index (CPI) data released today. The figures reveal that annual inflation has edged down ...Read more
Economy
April inflation report shows mixed signals for Australia's economic outlook
Australia's latest Consumer Price Index (CPI) data has sparked a flurry of analysis from economic experts, revealing a complex picture of the nation's inflationary landscape. State Street, a global ...Read more
Economy
Unemployment rises as job creation declines, says JobAdder CEO
In a revealing analysis of the current job market, Martin Herbst, CEO of JobAdder, has provided insights following the release of the latest Labour Force Data from the Australian Bureau of Statistics ...Read more
Economy
Labour force data reveals unexpected unemployment rise, says State Street economist
In a surprising turn of events, the latest Labour Force data has revealed a significant rise in unemployment, exceeding expectations and signalling a potential shift in the labour market narrativeRead more
Economy
Australian Made Week highlights the importance of local manufacturing in economic resilience
The spotlight is on Australia's manufacturing sector during Australian Made Week, held from May 18 to 24, as business and government leaders emphasise the need to bolster local capabilities, fortify ...Read more
Economy
Federal Budget introduces sweeping changes to tax, investment, and health care sectors
In the wake of the Federal Budget announcement last night, significant reforms are set to reshape the financial landscape for Australians, touching on everything from tax deductions to superannuation ...Read more
Economy
Hot US inflation leaves Fed’s new chair Warsh cornered on rates: deVere CEO
In a climate of escalating inflation and geopolitical tensions, the newly appointed Chair of the Federal Reserve, Kevin Warsh, finds himself in a precarious position regarding interest rate ...Read more
Economy
Inflation dip welcomed, but employers remain cautious, says JobAdder CEO
As the Australian Bureau of Statistics (ABS) released its latest Consumer Price Index (CPI) figures today, revealing a dip in inflation, industry leaders are cautiously optimistic. However, this ...Read more
Economy
Inflation eases slightly as fuel prices drop, but other pressures remain
Australia's inflation landscape experienced a slight reprieve in April, according to the latest Consumer Price Index (CPI) data released today. The figures reveal that annual inflation has edged down ...Read more
Economy
April inflation report shows mixed signals for Australia's economic outlook
Australia's latest Consumer Price Index (CPI) data has sparked a flurry of analysis from economic experts, revealing a complex picture of the nation's inflationary landscape. State Street, a global ...Read more
Economy
Unemployment rises as job creation declines, says JobAdder CEO
In a revealing analysis of the current job market, Martin Herbst, CEO of JobAdder, has provided insights following the release of the latest Labour Force Data from the Australian Bureau of Statistics ...Read more
Economy
Labour force data reveals unexpected unemployment rise, says State Street economist
In a surprising turn of events, the latest Labour Force data has revealed a significant rise in unemployment, exceeding expectations and signalling a potential shift in the labour market narrativeRead more
Economy
Australian Made Week highlights the importance of local manufacturing in economic resilience
The spotlight is on Australia's manufacturing sector during Australian Made Week, held from May 18 to 24, as business and government leaders emphasise the need to bolster local capabilities, fortify ...Read more
Economy
Federal Budget introduces sweeping changes to tax, investment, and health care sectors
In the wake of the Federal Budget announcement last night, significant reforms are set to reshape the financial landscape for Australians, touching on everything from tax deductions to superannuation ...Read more
Economy
Hot US inflation leaves Fed’s new chair Warsh cornered on rates: deVere CEO
In a climate of escalating inflation and geopolitical tensions, the newly appointed Chair of the Federal Reserve, Kevin Warsh, finds himself in a precarious position regarding interest rate ...Read more
