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Economic growth and household incomes will slow over the coming years but Australia remains well poised to avoid recession according to the RBA.
Reserve Bank deputy governor Ric Battellino said yesterday that while the economic outlook remained uncertain there was no evidence that Australia was falling into recession.
“Australia managed to sidestep the 2001 global recession. Can it do that again?
“That is certainly what we are aiming for and there is nothing in the data to date to suggest that we are off track,” he said.
Mr Battellino said it was important to remain optimistic and urged people to remember the nature of economic cycles.
“While nobody can predict accurately all that lies ahead it is important not to become too pessimistic because fundamentally household finances and the economy more generally remain in good shape,” he said.
“The truth is that the economy cannot always grow above average and it certainly cannot maintain the pace of the past five years.”
“These periods [of below average growth] provide the economy with the breathing space to sustain the expansion,” he said.
Published: 31-10-08
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