Australia’s central bank said yesterday the country is accelerating faster than expected out of the global downturn thanks partly to demand from China, but warned against becoming too reliant on just a few countries for the recovery.
In its latest quarterly statement on monetary policy, the Reserve Bank of Australia (RBA) more than tripled this year’s growth forecast to 1.75 percent from the 0.5 percent it predicted in August and raised its forecast for next year to 3.25 percent from 2.25 percent.
RATE HIKE
PHOTO: REUTERS
The RBA — which last month became the first central bank of a developed economy to raise interest rates and hiked them again this week — signaled it would keep winding back a series of cuts that took rates to five-decade lows this year to keep the economy moving.
“A further gradual lessening of monetary stimulus is likely to be required over time if the economy evolves broadly as expected,” the bank said.
Australia’s stock market rallied yesterday, with the main benchmark rising nearly 2 percent. Since the start of the year, Australia’s currency has risen more than 30 percent while the stock market has climbed almost 24 percent.
There is growing evidence that Australia has weathered the economic downturn well.
The bank credited lower rates, some A$42 billion (US$37 billion) in government stimulus spending and “the strong bounce back in Asia, particularly in China.”
“Asia is at the forefront of the global recovery,” it said.
MINERALS
Helping drive Australia’s growth are the huge amounts of iron ore and other minerals it exports to China, Japan, South Korea and other nations.
The bank said export volumes had stayed broadly unchanged despite a sharp downturn in global trade and investment in the sector — especially in liquefied natural gas — is expected to grow.
“This expected rise in investment — which is already at a high level relative to GDP and compared with other developed economies — should further boost the supply side of the Australian economy, although as it takes place, short-term capacity restraints could again emerge in part of the economy,” the bank said.
In a speech late on Thursday, RBA Governor Glenn Stevens cautioned that outsized growth in the share of the economy taken up by mining could drain workers and other resources from other sectors, potentially reducing the economy’s resilience.
“The emergence of China and India is a benefit to Australia, but we stand to have a heightened exposure to anything going seriously wrong in those countries,” Stevens said.
Still, “such concentration ... may well be worth accepting if the return from doing so were high enough, as it appears they might be,” he said.
FREEDOM OF NAVIGATION: The UK would continue to reinforce ties with Taiwan ‘in a wide range of areas’ as a part of a ‘strong unofficial relationship,’ a paper said The UK plans to conduct more freedom of navigation operations in the Taiwan Strait and the South China Sea, British Secretary of State for Foreign, Commonwealth and Development Affairs David Lammy told the British House of Commons on Tuesday. British Member of Parliament Desmond Swayne said that the Royal Navy’s HMS Spey had passed through the Taiwan Strait “in pursuit of vital international freedom of navigation in the South China Sea.” Swayne asked Lammy whether he agreed that it was “proper and lawful” to do so, and if the UK would continue to carry out similar operations. Lammy replied “yes” to both questions. The
‘OF COURSE A COUNTRY’: The president outlined that Taiwan has all the necessary features of a nation, including citizens, land, government and sovereignty President William Lai (賴清德) discussed the meaning of “nation” during a speech in New Taipei City last night, emphasizing that Taiwan is a country as he condemned China’s misinterpretation of UN Resolution 2758. The speech was the first in a series of 10 that Lai is scheduled to give across Taiwan. It is the responsibility of Taiwanese citizens to stand united to defend their national sovereignty, democracy, liberty, way of life and the future of the next generation, Lai said. This is the most important legacy the people of this era could pass on to future generations, he said. Lai went on to discuss
SECOND SPEECH: All political parties should work together to defend democracy, protect Taiwan and resist the CCP, despite their differences, the president said President William Lai (賴清德) yesterday discussed how pro-Taiwan and pro-Republic of China (ROC) groups can agree to maintain solidarity on the issue of protecting Taiwan and resisting the Chinese Communist Party (CCP). The talk, delivered last night at Taoyuan’s Hakka Youth Association, was the second in a series of 10 that Lai is scheduled to give across Taiwan. Citing Taiwanese democracy pioneer Chiang Wei-shui’s (蔣渭水) slogan that solidarity brings strength, Lai said it was a call for political parties to find consensus amid disagreements on behalf of bettering the nation. All political parties should work together to defend democracy, protect Taiwan and resist
By refusing to agree spending increases to appease US President Donald Trump, Spanish Prime Minister Pedro Sanchez threatened to derail a summit that NATO Secretary-General Mark Rutte needs to run smoothly for the sake of the military alliance’s future survival. Ahead of yesterday’s gathering in The Hague, Netherlands, things were going off the rails. European officials have expressed irritation at the spoiler role that Sanchez is playing when their No. 1 task is to line up behind a pledge to raise defense spending to 5 percent of GDP. Rutte needed to keep Spain in line while preventing others such as Slovakia
RSS