The Reserve Bank of Australia (RBA) could cut the official cash rate as early as next month, AMP’s chief economist Shane Oliver has said.
Mr Oliver said the lower than expected inflation result for the March quarter had left the door open for another RBA interest rate cut.
Last week, the consumer price index added 0.4 per cent in the quarter – slightly lower than the 0.6 per cent economists had been predicting.
According to Mr Oliver, another rate cut would help shore up the economy as the mining investment boom slows.
“The bottom line is that inflation is not a problem in Australia and given the patchy and tentative nature of the response to interest rate cuts so far and the
impending mining investment slowdown, the RBA should act on its easing bias and cut interest rates another 0.25 per cent,” Mr Oliver said.
“This could occur as early as next month, but the June meeting may be more likely.”
Written by a staff reporter in – The Adviser.