The Reserve Bank of Australia has stated that Australia’s recession could be over by Christmas. A recovery may be on the agenda as confidence and economic activy returns to the market on both a globa scale and locally in Australia. They aslo believe that the worst of the global gloom may then be behind us aswell.
Backed by strong signs of improvement in China, the local economy could show signs of recovery as Australia is China’s larget trading partner. This backed up with certain local stimulas packages has resulted in consumer confidence increasing slightly too.
The RBA have stated that “In the case of the Australian economy, members observed that there were signs that the economic stimulus that had been applied was supporting demand. Nonetheless, substantial growth was not expected to resume until around the end of the year.”
So if the Reserve Bank of Australia is eyeing any sort of recovery in the pipeline the likley hood of any furture interest rate cuts in the short term will be relatively low. That being said, if the economy doesn’t start to improve or remains weighed down, then the RBA will be forced to cut rates further in the second half of the year.