2017.08.1503:52:00UTC+00RBA Renews Warning on Swelling Household Debt

Australia's central bank renewed its caution against increasing household debt, despite the prospect for the country's economy improving, the minutes of the latest policy decision showed.

During the monthly meeting where the Reserve Bank of Australia ruled to stand pat on rates, it noted the need to balance the risks that are linked to the elevated levels of household debt amid a low-inflation economy.

It added that better employment gains this year equates to a stronger labor market position.

The bank restated its GDP growth expectations. It expects the economy to expand around 3 percent in 2018 and 2019, buttressed by low interest rates. A faster rate of growth in non-mining business investment is also anticipated.

The main shift is one of focus after the RBA omitted the labor market and inserted household balance sheets to its key points of concern, alongside the residential property market. Currently, Australia's household debt stands at a record of 190 percent of the real income. Despite this concern, the minutes expressed increasing confidence that the country's economy will solidify and it is bound to gain the benefits of a much improved global economic backdrop.