Weekend Economist: Not half bad growth

June's sudden GDP slowdown is unlikely to surprise or concern the Reserve Bank. But growth in the latter half of 2014 is on track be much higher than the bank expects.

The Reserve Bank board meets next week on September 2. There will be no policy change and we expect the governor’s statement to repeat the key themes, "the most prudent course is likely to be a period of stability in interest rates” and “the exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth in the economy."

Of course the board will not be in a position to conduct its deliberations with knowledge of growth in the June quarter. The June 2014 GDP Report (National Accounts) will not be released until the day following the board meeting.


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