"Lowe's most notable conclusion is that the commodity headwinds are easing," said Michael Blythe, chief economist at Commonwealth Bank. "Some three-quarters of the decline in mining capex is in place and if recent increases in commodity prices are sustained the drag on incomes will come to an end. "Our judgement is that (the) easing in monetary policy is supporting jobs and economic activity, and thus improving the prospects for sustainable growth and inflation outcomes consistent with the medium-term target," Lowe told parliament on Thursday.The central bank chief appears before the committee twice a year to answer questions on the economy and monetary policy. A career central banker, Lowe has just taken over from Glenn Stevens who spent a decade in the top job.Recent data showed gross domestic product (GDP) grew 3.3% in the year to June, the fastest pace in four years. Retail sales have been anaemic and consumer confidence is falling.All of which could put the RBA in a tight spot and force more rate cuts.

Source: The Star September 22, 2016 06:18 UTC