Central bank expects strong economic growth in Australia in 2012

16:52, August 17, 2010      

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The Reserve Bank of Australia ( RBA) on Tuesday said the bank was expecting inflation to remain under control before economic growth surges to above-average levels in Australia next year.

Releasing the minutes of its August meeting, the central bank said global financial market volatility made it "appropriate" to leave interest rates on hold.

The Reserve Bank of Australia (RBA) also said economic growth would strengthen in 2011 and 2012 to "above-average rates" even though consumers are still cautious.

Like Treasury, the RBA sees an expansion pace of up to four percent by the middle of next year.

In another piece of good news for the Labor government, the RBA was expecting inflation to remain within the two to three percent target band "over the next year or so".

The experts saw this as a sign interest rates would remain on hold at 4.5 percent in the short term.

"It is clear that the Reserve Bank is unlikely to move on interest rates until more concrete economic data is available," Commonwealth Securities economist Savanth Sebastian said in a statement.

"No doubt the new era of consumer conservatism and weak trading environment for retailers would add weight to the argument for interest rates to remain on hold over the next few months."



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