RBA forecasts faster growth, lower jobless

Sydney

AUSTRALIA's central bank maintained its forecast of accelerating growth in response to easy policy, even as risks around China cast a shadow over the regional economic outlook.

The Reserve Bank of Australia trimmed its inflation forecast for the year through June 2016 and its 2017 growth projections in a quarterly monetary policy statement on Friday but it kept most of its estimates unchanged.

"A further increase in growth in household incomes and demand is anticipated, supported by rising employment, low interest rates and lower" petrol prices, it said. "The outlook for China's growth is a significant uncertainty for the outlook for the Australian economy."

Australia is benefiting from a depreciating local dollar that helps insulate the economy from shocks abroad and increases the competitiveness of local industries, whereas jurisdictions like Europe and Japan are struggling with their currencies. Policy makers kept rates unchanged at a record-low 2 per cent on Tuesday for a ninth month as they gauge the impact of recent financial market turbulence …