RBA Raises GDP Forecasts, Says Rate Hikes Likely To Continue

(RTTNews) - The Reserve Bank of Australia has increased its GDP forecast for 2009 and 2010, and indicated more interest rate hikes are coming.

The RBA’s Quarterly Monetary Policy Statement says the Australian economy is “resilient,” with GDP now expected to increase by a little more than two percent over the year to mid-2010, and for a 3.25 percent economic expansion for the year to mid 2011.

The bank said inflation continues to decline gradually, with the RBA’s assessment that underlying inflation was about 3.50 percent compared with the rate of about 4.50 percent one year earlier.

The RBA said interest rates are likely to rise further if the economy evolves broadly, as expected. The RBA raised interest rates by 25 basis points at both its October and November meetings.

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