Economic Snapshot – February 2017

In summary

February saw more signs of economic conditions improving, though perhaps less in Australia than in some other countries. Although the local economy grew a respectable 1.1% in the December quarter and business conditions improved in January, nevertheless the labour force remains under-utilised and business investment spending is expected to decline further. The strength of the Australian dollar is not helping and the Reserve Bank’s expectations about the economy this year may prove too optimistic. The RBA has left the cash rate at 1.5% and financial markets expect this to remain in place until the start of a new tightening cycle in early 2018.

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