What does RBA's Gentle Turning Point Refer to?

By Sophia Rodrigues

Published On 07 Nov 2019 , 12:00 AM

RBA Governor Philip Lowe first referred to gentle turning point at the Parliamentary testimony in August when he said "economy may have reached a gentle turning point." In late-September, the language strengthened to "has been reached." So what exactly is the gentle turning point based on? It is based on the fact that GDP growth in the 1H of 2019 was better than the 2H of 2018. (+0.5% q/q each in Q1 and Q2 2019; +0.3% in Q3 and +0.1% in Q4 2018). There is also an expectation that GDP would grow around 0.7% average in every qtr of 2020 which would be 2.8% y/y (widely regarded as trend growth).

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