Can the RBA defuse a mining time bomb?

The timing and size of the mining investment collapse will weigh heavily on Reserve Bank policymaking. If it miscalculates these factors, the economy could become a real mess.

Low interest rates continue to support the non-mining sector but there remains considerable uncertainty surrounding the timing of the mining investment collapse and the non-mining sector picking up. Get the timing right, and it will be smooth sailing ahead; get it wrong and we could be in for an almighty mess.

The Reserve Bank of Australia released its Statement on Monetary Policy today, which showed that the outlook for the Australian economy is largely unchanged since the February SMP.

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