RBA Minutes: High household debt levels warrant careful attention
|The minutes of the Reserve Bank of Australia (RBA) March meeting expressed concerns regarding the household debt and stressed the need for faster wage growth.
Key points (Source: Reuters)
- High household debt levels added to uncertainty over consumption, warranted careful attention
- Low rates playing a part in lowering unemployment, lifting inflation
- Repeats further progress on policy goals likely to be only gradual
- GDP growth expected to exceed potential growth in 2018
- CPI inflation expected to rise to a little above 2 pct this year
- Repeats rising a$ would slow pick up in economic growth, inflation
- AUD trade-weighted index still within range of past couple of years
- Strong employment had not yet led to a "Definitive pick-up" in wages growth
- Board saw some upside risks to forecasts for non-mining business investment
- Housing markets in Sydney and Melbourne had slowed, stable elsewhere
- Tighter mortgage lending rules had helped contain housing risks
- Expiry of interest only loans to pressure some borrowers, but overall impact limited
- Risks to Australia and the global economy would increase if countries responded to US Tariffs
- Global financial conditions accommodative despite higher yields, market volatility
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