RBA Debelle: Economy Grew in Q3 As Victoria Drag Less Than Expected

By Sophia Rodrigues

The Australian economy likely recorded positive growth in the September quarter as growth from rest of the nation was strong enough to offset the drag from Victoria, Reserve Bank Governor Guy Debelle said Tuesday.

Debelle made the comments in response to a question at the Senate Economics Legislation Committee hearing.

He said the RBA’s best guess is growth was positive, rather than negative, in the September quarter. “The offset in Victoria was not enough or the strength elsewhere in the country was more than the drag from Victoria,” Debelle said, adding the drag from Victoria was less than the RBA had expected.

Debelle said the range of uncertainties while making forecasts is the widest he’s seen in his career.

On a question on Quantitative Easing, Debelle said he couldn’t make any comments given this is a sensitive topic to be discussed just a few days from the RBA’s November 3 board meeting.

Debelle was asked about the outlook for Australia’s coal exports and especially if the RBA expects there would be structural decline in exports of fossil fuels.

He said the RBA is devoting time thinking about these issues while looking at other opportunities for energy exports.

One Senator questioned whether the RBA thinks it has done a good job since it became independent, given the cash rate is close to zero, housing prices are inflated, household debt is high and foreigners are buying Australia’s infrastructure assets.

Debelle said the RBA’s stated objective is full employment for the Australian population and ensuring low and stable inflation, and prior to the pandemic Australia’s inflation was only marginally away from the target.

--Contact: Sophia@centralbankintel.com