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.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS