FX.co ★ Australia Economy in ‘Pretty Good Spot’: RBA Gov Bullock

Australia's economy is currently on solid footing, with inflation aligning well within the central bank's target range of 2–3% and the labor market remaining robust, as stated by Governor Michele Bullock during a parliamentary committee session on Friday. "Our unemployment rate is sound. Inflation is back within the desired range, placing us in a favorable position," she remarked. An increase in household consumption is bolstering growth, effectively counterbalancing weaker public demand. Following a series of interest rate reductions totaling three since February, the Reserve Bank maintained its rate at 3.6% last month, as it closely observes the trajectory of inflation towards the target midpoint. Key factors such as strong consumer spending, real income growth, a stable housing market, and a tight labor market have contributed to the decision to hold the interest rates steady. However, Bullock noted that inflation in the services sector remains persistently high and flagged several global uncertainties, including protectionist policies from the United States, geopolitical tensions, and a reduction in demand from China, although the most severe tariff scenarios have not yet come to pass.