Australia’s central bank on Tuesday kept interest rates on hold at a record low, with governor Philip Lowe saying the economy was showing signs of life after three cuts this year.
Resource-rich Australia dodged the worst of the financial crisis but recently recorded its weakest annual economic growth in a decade, expanding just 1.4 percent in the year to June.
“After a soft patch in the second half of last year, a gentle turning point appears to have been reached,” Lowe said in a statement following the Reserve Bank of Australia’s monthly policy meeting.
The country has been battling increasing economic headwinds domestically, including falling employment, low wage growth and high household debt.
It is also feeling the impact of US-China trade tensions, which have rattled the global economy as central banks worldwide attempt to offset economic risks by lowering rates.
Lowe said there were now several positive influencers, including recent tax cuts for low- and middle-income earners, an upswing in house prices in Sydney and Melbourne, and a brighter outlook for the resources sector.
However, there remain concerns over the impact of lower consumer spending, as well as the flow-on effect of a prolonged drought currently gripping much of the east.