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The Australian Economy in 2019–20: Slower Growth, Record Low Interest Rates and a Changing Housing Landscape
Author(s) -
Tsiaplias Sarantis,
Wang Jiao
Publication year - 2020
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12367
Subject(s) - economics , inflation (cosmology) , interest rate , debt , unemployment , asset (computer security) , slowdown , monetary economics , china , wage growth , wage , labour economics , macroeconomics , geography , physics , computer security , archaeology , theoretical physics , computer science , economic growth
Economic activity in Australia slowed considerably in 2018–19, with domestic demand growth halving and unemployment rising. Consistent with the slowdown, both consumer and wage inflation have remained weak. A synchronised growth slow‐down was observed across major economies, to some extent underpinned by the on‐going US–China trade war. Central banks have responded to weak growth by cutting rates. The US Federal Reserve cut its target for the federal funds rate three times in 2019, as did Australia. To date, record low Australian interest rates have been associated with additional housing‐related debt and asset price appreciation.