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Further Interest Rate Cuts Supported by Economic Data

Release Date: 5/03/2013
Illawarra Business Chamber said mixed economic data supported the case for further cuts to interest rates as the Australian economy prepares to deal with a slowdown in mining investment.

“The European debt crisis appears to be abating and the US has avoided the ‘fiscal cliff’. However the Australian dollar remains stubbornly high and that is placing a lot of pressure on our import competitors and exporters making a strong case to reduce interest rates further in the coming months” said Mike Halloran, Acting CEO of the Illawarra Business Chamber.

“I know the RBA is taking a wait and see approach to assess the impact of previous interest rate cuts on the economy, but while we wait Australian businesses not directly benefiting from the mining investment boom are continuing to struggle in a subdued economic environment.

“These are the very Australian enterprises that will be called upon to pick up the slack when the mining investment boom subsides – a time that is drawing very close and will require non-mining sectors of the economy to be ready to employ those leaving the mining sector.

“Many businesses are struggling to tread water let alone expand and create more jobs. They need financial relief to help them innovate and continue to keep Australians in work.

“The RBA has indicated that inflation remains within their targeted range and that the Australian economy is undergoing a transitional phase as the mining investment boom peaks. The case is clearly building for further cuts to interest rates, if not this month, then certainly soon.”

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