Unemployment still key domestic risk

A stubbornly high unemployment rate remains the key domestic risk to Australia’s economy, with the Reserve Bank tipping wages and inflation to stay lower for longer as a result.

The central bank on Friday said economic risks were more to the downside in the near term, but that cuts in the cash rate and the federal government’s tax offsets should help stimulate household consumption over the medium term.

The¬†quarterly Statement on Monetary Policy confirmed the RBA’s revised forecast on GDP for 2019, from 2.75 per cent to 2.5 per cent, as well as a more subdued outlook on inflation through 2020.

AAP

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