The RBA has suggested that the Australian economy is recovering faster than the central bank expected, and as a result, interest rates and quantitative easing policies will remain as they are until at least February.
Governor Philip Lowe said “the economic recovery is underway” and “recent data has generally been better than expected.”
But he also added that recovery is dependent on significant policy support, and that this support will need to continue.
One example of this is the fact that 180,000 jobs were recovered, even as the JobKeeper and JobSeeker programs began to wind down. It may be tempting to hasten the withdrawal of support in light of this news, but that would be a mistake, the RBA says.
The RBA did specify that they are willing to adjust the Quantitative Easing program if required. Mr Lowe said “The board will keep the size of the bond purchase program under review, particularly in light of the evolving outlook for jobs and inflation.”
It’s not just the RBA surprised by the recovery: UBS, Citi, and Commonwealth Bank have also all revised their forecasts.