SYDNEY–Reserve Bank of Australia Gov. Philip Lowe said Tuesday that he doesn’t expect a recession in Australia over the coming years.
“I don’t see a recession on the horizon here,” he said.
Unemployment is the lowest in nearly 50 years, and labor market participation is at the highest ever, Mr. Lowe said in an answer to a question following a speech to a business group.
More working-age Australians are in employment than ever before and the number of job vacancies is at a record high, while households have strong savings buffers,” he added.
High commodity prices have also pushed the country’s terms of trade to record levels.
“Australia has a lot of positives, so we don’t see a recession on the horizon. But if the last two years have taught us anything, you can’t rule anything out,” Mr. Lowe said.
The comments follow consecutive interest-rate increases in May and June of 25 basis points and 50 basis points, respectively.
Mr. Lowe said more rate increases are coming and didn’t rule out a further 50-basis-point hike in July.
Still, he poured cold water on market pricing for an official cash rate of close to 4% by the end of the year, from 0.85% currently, saying “it was not particularly likely.”
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