Australia central bank cuts growth outlook, holds rates

Australia's central bank cut its economic growth forecasts and kept interest rates at a record low yesterday, as house prices in major cities slumped and consumer spending weakened.

"Some downside risks have increased," governor Philip Lowe said after the Reserve Bank of Australia's first board meeting of the year.

The central bank predicted the economy would expand 3.0 per cent in

2019, much slower than its previous forecast of 3.5 per cent. Borrowing costs were held at 1.50 per cent, where they have been since August 2016.

"The main domestic uncertainty remains around the outlook for household spending and the effect of falling housing prices in some cities," said Lowe.

House prices, particularly in Sydney and Melbourne, continued to fall in January and the pace had sped up over the past three months, leading property data provider CoreLogic said last week.

 

Australia central bank cuts growth outlook, holds rates

Australias central bank cut its economic growth forecasts and kept interest rates at a record low yesterday, as house prices in major cities slumped and consumer spending weakened. Some downside risks have increased, governor Philip Lowe said after the Reserve Bank of Australias first board meeting of the year. The central bank predicted the economy would expand 3.0 per cent in 2019, much slower than its previous forecast of 3.5 per cent. Borrowing costs were held at 1.50 per cent, where they have been since August 2016. The main domestic uncertainty remains around the outlook for household spending and the effect of falling housing prices in some cities, said Lowe. House prices, particularly in Sydney and Melbourne, continued to fall in January and the pace had sped up over the past three months, leading property data provider CoreLogic said last week.