Reserve Bank of Australia (RBA) Governor Philip Lowe said the economy was more resilient than initially expected, but continued support was needed as inflation remained low and unemployment was high.
Speaking at the National Press Club, Canberra, Philip Lowe said the damage caused by the coronavirus pandemic was not as bad as expected, especially with stimulus measures and the launch of vaccines further boosting the prospects for recovery.
Governor Lowe added that the main economic indicator of the unemployment rate was better than the central bank's previous forecast.
According to previous central bank expectations, the unemployment rate is expected to be slightly below 10% by the end of 2020, but still around 7% by the end of the year. Australia's unemployment rate reading, however, was significantly better than this, with a record 6.6%, Lowe said.
However, he reminded that although the figures recorded are better, it does not mean that the economy is in good health.
Therefore, Lowe said it was too early for them to consider a reduction in monetary policy easing and also hoped that the government would respond with more fiscal stimulus as rising consumer spending was crucial to recovery.
The RBA on Tuesday further expanded its bond purchase program and maintained interest rates at a low of 0.10%. Lowe also hinted that interest rates would not rise until at least 2025, as long as employment and inflation targets were not met.
