UBS economists expect the Reserve Bank of Australia (RBA) to downgrade its economic growth forecasts on Tuesday. The central bank is also expected to keep rates steady at 0.75% and leave the door open for a rate cut in the second quarter.
Key quotes
The RBA is likely to again lower their cumulative growth profile by close to about 50 basis points, continuing their downgrade cycle.
While additional bushfire-related Government spending of about $3 billion is likely, this is not enough to stop the RBA from downgrading their outlook.
Bushfires and Coronavirus pose material downside to the RBA’s forecast of a strong acceleration to an above-trend 2.8 percent in the fourth quarter of 2020 and 3.1 percent in the fourth quarter of 2021.
The RBA delivered three 25 basis point rate cuts in 2019.
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