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Economy

Updates on the state of the economy, growth, inflation, and employment.

  • Credit: Darya Jum / Unsplash

    More Australian interest rate changes possible: RBA

    Credit: Darya Jum / Unsplash

    Australia’s central bank has flagged the possibility of more changes in interest rates after sounding a note of caution about the outlook for the economy. The Reserve Bank of Australia (RBA) earlier announced the 25-basis point cut in the official cash interest rate that the market expected. RBA Governor Michelle Bulloch said the bank’s Monetary Policy Board was confident about its decision to lower the rate to 3.85% because it was right at this point at the time. “Where this leads us in the future is a little more uncertain I would have to say, probably a lot more uncertain, given everything that’s going on,” Bulloch told a news conference. She noted that the RBA had talked of different scenarios in the Statement on Monetary Policy published with its decision including “extreme downside” and “back to trade peace” scenarios. ”Depending on where we end up on that spectrum it’s possible there might be more interest rate adjustments,” Bulloch said. The interest rate cut was welcomed by Treasurer Jim Chalmers, who told a news conference: “This is welcome relief for millions of Australians. This is the right decision for the right reasons.” Australia’s Big Four Banks responded to the rate cut by lowering variable i

  • Credit: Pete Linforth / Pixabay

    RBA cautious about outlook after interest rate cut

    Credit: Pete Linforth / Pixabay

    The Reserve Bank of Australia (RBA) has signalled it is taking a careful approach to monetary policy after delivering a 25 basis point cut in interest rates. The decision was consistent with financial market expectations that the central bank would lower the official cash rate to 3.85%. In a statement after a two day meeting, the RBA’s Monetary Policy Board said although the cut would make monetary policy somewhat less restrictive, it remained cautious about the outlook, particularly given the heightened level of uncertainty about aggregate demand and supply. The Board said it considered a severe downside scenario and noted monetary policy was well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia. “The Board will be attentive to the data and the evolving assessment of risks to guide its decisions,” the RBA Board said in a statement. “In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. “The Board is focused on its mandate to deliver price stability and full employment and will do what it conside

  • Credit: Hush Naidoo Jade Photography / Unsplash

    Victoria's state budget focuses on healthcare and families

    Credit: Hush Naidoo Jade Photography / Unsplash

    UPDATED: The Victorian Government has handed down its 2025 state budget, with an emphasis on the troubled healthcare system in a bid to make it cheaper and more accessible. Treasurer Jaclyn Symes revealed net debt will reach A$167.6 billion this year and will eventually grow to $194 billion in three years. This will lead to the state paying $7.6 billion in interest in 2025-26 or $20.7 million a day. The Allan government announced an A$634.3 million package to open nine new or expanded hospitals. The government has also committed $11.1 billion to health, including a $9.3 billion boost to hospital funding. “We’re focused on what matters most – opening new hospitals, delivering better care and backing our health workforce – because free, accessible and lifesaving care is what every Victorian deserves,” Minister for health and ambulance services, Mary-Anne Thomas said. The majority of the money will be spent on Urgent Care Clinics across the state and pharmacists will be able to treat more conditions, with consultations free of charge. "We are working to ensure our hospitals have the funding that they need in order to meet the needs of Victorians," said Health Minister Mary-Anne Thomas. Symes is set to deliver

  • Credit: Raph_PH / Wikimedia Commons

    Goodbye RBA Tuesday doubt, rate cut seen set in stone

    Credit: Raph_PH / Wikimedia Commons

    The Reserve Bank of Australia (RBA) is expected to cut interest rates on Tuesday with at least two more reductions to come this year, according to market economists. They are forecasting a 25 basis point (bp) lowering of the official cash interest rate (OCR) when the RBA makes its next monetary policy announcement at 2:30 pm AEST (4.30am GMT Monday), although at least one bank has tipped 50 bp. The probability of a smaller cut is 96%, according to the RBA Rate Tracker, which shows market expectations of a change in the OCR based on the Australian Securities Exchange’s 30 Day Interbank Cash Rate Futures prices. Commonwealth Bank (CBA) Group economists expect the RBA Board to cut interest rates from 4.1% to 3.85% as core inflation remains within its 2%-3% target range while trade tensions fuel economic growth concerns, CommSec said. “We continue to look forward to an end year cash rate of 3.35% and our base case has the RBA cutting the cash rate by 25 basis points this year in May, August and November,” they wrote in an economics research note. In a note ANZ said although the resilient labour market, reflected in unemployment remaining between 3.9% and 4.2% for a 14th consecutive month in April, may add to discussions

  • Credit: Edward Eyer / Pexels

    China’s retail sales miss market expectations in April

    Credit: Edward Eyer / Pexels

    China’s retail sales growth cooled in April, raising fresh concerns over domestic consumption strength in the world’s second-largest economy, despite signs of resilience in industrial production and employment. According to data released Monday by the National Bureau of Statistics (NBS), retail sales rose 5.1% in April from a year earlier, below the 5.5% forecast and down from March’s 5.9% increase. The NBS said in the statement: “Production and demand grew steadily, employment was generally stable, and new growth drivers accumulated and grew. The national economy maintained stable growth despite pressure, sustaining the new and positive development momentum." In contrast to the weak consumption data, industrial production rose 6.1% year-on-year in April, beating market expectations of a 5.5% gain and offering some support to the overall growth outlook. Fixed-asset investment, which covers infrastructure and property spending, grew 4.0% in the first four months of 2025, narrowly missing forecasts of a 4.2% rise. Labour market conditions showed slight improvement, with the urban survey-based unemployment rate easing to 5.1% in April from 5.2% in March. The mixed economic snapshot arrives as China and the United St

  • Credit: SecScottBessent / X

    Negotiate 'in good faith' or face max tariffs: Bessent

    Credit: SecScottBessent / X

    The United States’ top tariff negotiator and Treasury Secretary Scott Bessent has said President Trump will stick with the highest tariff rates presented last month on countries that do not negotiate “in good faith”. Nations that come into the crosshairs will receive letters from Bessent outlining the maximum tariff rates if “they’re not negotiating in good faith," he said in an NBC TV interview. “Some countries were at 10%, some were substantially higher. “[If] you don’t want to negotiate, then it will spring back to the [2 April] level.” What “good faith” negotiations look like wasn’t clarified, nor is there a deadline for a move like that to happen. The UK and China are the first two major economies to have negotiated deals so far, with the British negotiating a flat 10% tariff rate with exemptions that carry 0% increases on aluminium, ethanol and aviation parts. Find out more: UK trade deal 'first of many', as tariffs reduced to 10% A 90-day pause on tariff implementation between the U.S. and China was brokered last week too, coming down from a 145% tariff imposed on the latter, down to 30% as negotiations continue. Find out more: Markets go ballistic as US, China agree tariff pause

  • Credit: Patrick / Pixabay

    Rising debt causes US to lose last perfect credit rating

    Credit: Patrick / Pixabay

    Moody’s has stripped the United States of its last remaining AAA credit rating, downgrading it to Aa1, due to mounting debt and rising interest payment ratios. This marks the end of an era, as Moody's maintained the U.S.’s pristine ratings since 1917. The downgrade follows similar moves by Fitch Ratings in 2023 and S&P Global Ratings in 2011, reinforcing concerns about Washington’s inability to rein in ballooning deficits. While Moody’s acknowledges the U.S.’s economic resilience and the dollar’s role as the global reserve currency, it warns that federal debt is projected to reach 134% of GDP by 2035, up from 98% last year. The White House swiftly responded, dismissing Moody’s credibility and blaming previous fiscal mismanagement for the downgrade. Meanwhile, Trump’s landmark spending bill — dubbed the “Big Beautiful Bill” — suffered a setback in Congress, failing to pass the House Budget Committee as some Republicans opposed it. The bill, which could add trillions to the national debt, has heightened investor concerns about Washington’s fiscal trajectory. Moody’s decision underscores the growing pressure on U.S. policymakers to stabilise debt levels and restore confidence in the country’s financial standing.

  • Credit: Ari He / flickr

    Tariff pauses leave economic forecasts in limbo

    Credit: Ari He / flickr

    In a dramatic shift in United States trade policy, President Donald Trump’s decision on 10 April to grant a 90-day pause on additional tariffs has thrown global markets into disarray. The Trump administration also halted a planned 125% tariff hike on key Chinese electronics, offering a short-term boost to major technology stocks like Apple and NVIDIA. The unexpected moves come at a time when markets had already been rattled by a series of tit-for-tat tariff escalations, making the economic outlook highly uncertain. Economists across the world have been busy recalibrating their forecasts, with a preliminary consensus pointing to slower economic growth and mounting inflationary pressures. The pause was widely interpreted as a tactical delay, a brief hiatus that allowed the administration to negotiate more flexible trade deals, while some analysts noted dissatisfied foreigners selling U.S. bonds, causing a surge in yields. However, this temporary reprieve is unlikely to mask the underlying issues. Financial institutions and policymakers alike are concerned that the very measures designed to protect domestic industries may end up generating a self-inflicted wound that ripples throughout the global economy. Even as Pr

  • Credit: Bernard Hermant / Unsplash

    US retail sales slow on tariff impact; PPI falls 0.5%

    Credit: Bernard Hermant / Unsplash

    United States retail sales rose marginally in April, signalling a slowdown in consumer spending as the initial boost from early motor vehicle purchases ahead of tariff hikes faded. The Commerce Department’s Census Bureau reported on Thursday that retail sales edged up 0.1% last month, following a revised 1.7% surge in March. This was slightly better than expectations for flat growth, but highlighted the growing drag of trade tensions. On a year-over-year basis, retail sales rose 5.2%. Sales at motor vehicle dealerships, which had surged 5.5% in March, slipped by 0.1% in April. Sporting goods, hobby, and music stores saw a 2.5% drop, while miscellaneous store retailers reported a 2.1% decline. Online retail showed modest growth, rising 0.2%, and food services and drinking places posted a 1.2% increase after a 3.0% rebound in March. The data adds evidence that President Trump's tariff policies, even with the temporary 90-day truce with China reached last weekend, are beginning to curb consumer spending. A separate report from the Labor Department painted a similar picture of cooling demand. The producer price index (PPI) for final demand fell 0.5% in April, well ahead of an expected 0.2% growth. On a year-ove

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