Reserve Bank deputy governor Guy Debelle says the RBA now believes the country’s first recession in three decades ended in the September Quarter. “As best as we can tell, the growth elsewhere in the country was more than the drag from Victoria,” he says.
Ahead of a highly-anticipated RBA board meeting next Tuesday – when the cash rate is likely to be reduced by a further 0.15 percentage points to 0.1% – Debelle told Senate estimates that “our best guess is it looks like the September Quarter recorded positive growth rather than slightly negative”.
“And as best as we can tell, the growth elsewhere in the country was more than the drag from Victoria, and possibly the drag from Victoria was a little less than what we guessed back in August,” he says. The RBA will release a new set of forecasts in its quarterly Statement on Monetary Policy (SOMP) next Friday.
The bank’s August SOMP said “the effects of the heightened activity restrictions in Victoria are likely to offset the pick-up in GDP growth in other parts of the economy in the September Quarter”.