RBA deputy governor Guy Debelle says low interest rates will eventually boost the household sector.Credit:Peter Rae
Dr Debelle said inbound airline capacity from China into Australia had fallen by 90 per cent since January alone. Tourist numbers from other countries had"held up reasonably well",he said,but that"may no longer be true".
The Reserve Bank last week took official interest rates to a fresh all-time low of 0.5 per cent with markets expecting another quarter percentage point cut at its meeting next month.
Dr Debelle said even if interest rate cuts were not used by households to spend more,they would eventually feed through to the broader economy.
Loading
"Lower interest rates will provide more disposable income to the household sector and those businesses with debt,"he said.
"They may not spend it straight away,but it brings forward the day when they will be comfortable with their balance sheets and resume a normal pattern of spending."