Reserve Bank governor Philip Lowe remains upbeat about the economy,but the bank will continue to buy billions of dollars of government debt a week until at least February.
At the same time,it will keep official interest rates on hold at 0.1 per cent,re-affirming its belief they will not be increased until 2024 at the earliest because of ongoing weak wages growth.
RBA governor Philip Lowe said the current lockdowns across NSW,Victoria and the ACT would deliver a substantial hit to the economy through the September quarter with a lift in the jobless rate,although he expected a recovery to begin through the final three months of this year.
He said while the setback would be temporary,it would not be until the second half of next year before the economy was back to its pre-lockdown vigour.
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“The Delta outbreak is expected to delay,but not derail,the recovery. As vaccination rates increase further and restrictions are eased,the economy should bounce back,” he said.
“There is,however,uncertainty about the timing and pace of this bounce-back,and it is likely to be slower than that earlier in the year.”
“In our central scenario,the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year.”