Last call for rate cuts as local growth surges

Australian GDP is on track for 3.8 per cent growth in 2014, underpinned by retail spending and housing gains while business investment weakens. It means the monetary easing cycle is almost over.

The Australian economy is poised to end 2013 with a surge in activity. Such is the momentum that GDP is on track for 3.8 per cent growth in 2014. This lift in growth should see the unemployment rate drop to 5 per cent or a little less by the end of that year while the inflation rate will edge higher, probably moving to the upper half of the Reserve Bank’s target band.

The reasons are straightforward.

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