The Reserve Bank of Australia is expected to maintain the record rate of 0.25% until the end of 2023, according to the latest forecasts from Westpac.
Bill Evans, chief economist at Westpac, said that the RBA is unlikely to reach its unemployment target, especially with the recent closings due to the economic impact of the economic impact ; COVID-19 epidemic.
"These forecasts are based on the central outlook of the Bank for the political response to the Covid crisis, according to which internal closures are gradually relaxed during the quarters of June and September and" mainly removed towards the end of the year. # 39 "year," said Evans in a statement. piece in Property Observer.
Evans said the RBA's forecast is "broadly in line" with that of Westpac, particularly in terms of economic growth for the first half of 2020, which is expected to decline by about 9.5%. The unemployment rate should reach 9% at the end of June.
For the whole year, Westpac forecasts that the economy will contract by 5%.
Read also: The low rates are fixed at the prices of the buoys
However, the RBA expects the economy to grow from 6% to 7% in 2021, significantly more than Westpac's 4% forecast.
"This bullish view is despite the observation that the dual health and economic emergency that we are currently experiencing will cast a shadow over our economy for some time to come," said Evans.
Nevertheless, Evans said that the RBA will likely remain an "effective force" in the political debate through its management of the three-year bond yield target.
"Choosing the target rate of return for three-year bonds as the same as the target rate is strategic because it sends a clear message that if the central bank is ready to buy three-year bonds at the overnight rate day, it is reasonable to expect him to be comfortable with the 0.25% cash rate for the full three years, "he said.
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