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Analysts at Goldman Sachs offer their expectations from the Reserve Bank of Australia (RBA) monetary policy decision over the coming year.

Key Quotes:

“Absent a steady rise in the unemployment rate over a couple of months (not our base case), rates on hold in 2020 now looks to us the most likely scenario — particularly given Governor Lowe’s renewed concerns around low rates, house prices & financial stability.

Downgraded its GDP forecast for Australia, citing bushfire and coronavirus drag in Q1 to 2.4% vs. 2.7% previous.

Then a quick rebound from Q2

There are risks to their projections, skewed to the downside and considerable uncertainty. 

2020 GDP could be as weak as 1.7% in a scenario where the rate of new viral infections does not peak until sometime in 2Q2020.”