2019.09.2408:13:00UTC+00RBA's Lowe Expects Australia's Economic Growth To Pick Up

Reserve Bank of Australia Governor Philip Lowe said the economic growth is set to pick up, but a strong expansion is not expected in the near term.

The economy has reached a gentle turning point after having been through a soft patch, he told the Armidale Business Chamber on Tuesday.

GDP growth over the first half of this year was stronger than in the second half of 2018. "We are expecting a further modest pick-up in the quarters ahead," said Lowe.

However, Lowe noted that the main source of domestic uncertainty continues to be the strength of household spending.

According to Lowe, tax refunds will boost household income by 0.6 percent this year. Half of this refund is likely to be spent over the coming quarters. Disposable income is also being underpinned by lower interest rates, he observed.

The governor added that the fundamental factors underpinning the longer-term outlook for the Australian economy remain strong.

Regarding the outlook for investment, Lowe said he does not see the same spike in the measure of policy uncertainty in Australia. However, there has been some softening in measures of business conditions.

The RBA lowered its interest rate in June and July to make more assured progress towards full employment and the inflation target, Lowe said. "Further monetary easing may well be required," he said.

"At our Board meeting next week, we will again take stock of the evidence," he added.