The Reserve Bank says that employment growth improved in 2015 and GDP growth has also done well.

 

The RBA said low inflation will allow it to cut the cash rate if jobs growth flattens out or the global economy deteriorates. This has left economists divided about whether or not the bank will lower the cash rate in 2016.

 

Westpac chief economist Bill Evans says the December 2015 Quarter GDP figures showed better-than-expected growth of 3.0%, but the RBA is paying attention to developments in China.

 

“Sudden adverse developments in that region would undoubtedly prompt consideration for policy change,” said Evans.

 

He said markets will have to wait until the next board meeting to gauge the bank’s level of unrest around the recent jump in the Australian dollar.