Australian Economy Has Turned a Corner, a Recovery on the Way: RBA Boss

Australian Economy Has Turned a Corner, a Recovery on the Way: RBA Boss
Governor of the Reserve Bank of Australia, Philip Lowe, makes a speech on March 19, 2020 in Sydney, Australia. (Brendon Thorne/Getty Images)

Reserve Bank of Australia governor Philip Lowe believes the economy has turned a corner and a recovery is on the way.

Addressing federal politicians in Canberra, Lowe said he expected solid economic growth over the September and December quarters.

Lowe was speaking ahead of the release of the national accounts for the September quarter, which economists expect will show the economy expanded by 2.5 percent from June quarter.

This would mark the end of Australia's first recession since the early 1990s and partially recoup some of the hefty contraction reported in the June quarter as a result of COVID-19 pandemic.

"We have now turned the corner and a recovery is under way," Lowe told a House of Representatives economics committee on December 2.

"We are now expecting GDP growth to be solidly positive in both the September and December quarters."

He noted there was a wide range of forecasts for the September quarter result—from around one percent to four percent.

"I would hope that the number would be at least two percent," Lowe said.

He said this was a much better outcome than the central bank expected when it last addressed the committee three months ago, and when he thought it would be lucky to see positive growth in the September quarter.

"Things have turned out to be much better," he said.

"Employment growth has been stronger, retail has been stronger and the housing market has been more resilient."

By Colin Brinsden in Canberra