CANBERRA, AAP – Economists are finalising their forecasts for key economic growth figures as the Reserve Bank board sits for its monthly meeting.
Treasury secretary Steven Kennedy and his senior team are also due to face a Senate hearing in Canberra to dissect the federal budget and the national economic outlook.
The central bank is widely expected to leave its key interest rates unchanged at a record low 0.1 per cent after its meeting on Tuesday.
The bank has already flagged any changes to its bond targeting and buying program will be announced in July.
“The RBA is firmly in wait-and-watch mode,” leading economist Su-Lin Ong said.
“While it may note the current Victorian situation it will not likely do much more than that given the uncertainty. A more prolonged lockdown would be needed to alter its increasing confidence in the recovery.”
Victoria’s latest seven-day lockdown is due to end on Thursday night but new infections, while still small, have steadily grown over the past few days.
In its latest economic outlook, the Organisation for Cooperation and Development expects Australia to enjoy strong 5.1 per cent growth in 2021, but has warned this could be at risk if the COVID-19 vaccine is not widespread.
Victoria’s lockdown is also expected to undermine the latest weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending.
At this stage, Wednesday’s national accounts for the March quarter are forecast to show economic growth of 1.1 per cent.
This would leave the annual rate at 0.3 per cent, meaning the economy has now fully recovered from last year’s deep recession.
Economists will finalise their forecasts once the latest company profit, export and government finance data is dumped on Tuesday.
Also due is the CoreLogic home value index, which is expected to show a further gain of around two per cent for May, driven by a three per cent increase in Sydney house prices.
However, building approval figures for April are not expected to be so upbeat, dropping 10 per cent as a result of the government’s HomeBuilder grants scheme closing in March.