RBA deputy governor Philip Lowe has confidence in the economy’s ability to cope with shocks, despite recent sluggish economic growth.

The economy has adjusted to a positive shock from booming commodity prices without overheating, and is now managing moderate economic growth despite falling commodity prices says Dr Lowe.

“This is a significant achievement and is a testimony to the underlying flexibility of our economy,” he said.

Dr Lowe said there were three elements to the economy’s flexibility – the exchange rate, the labour market and monetary policy – and each was helping the economy’s transition away from the mining investment boom.