RBA Monetary Policy Statement: RBA lowers its GDP forecasts substantially

cuts GDP forecasts, sees 2.8 pct y/y Dec 2018, 3.0 pct Dec 2019, 2.7 pct Dec 2020, 2.7 pct June 2021

lowers inflation forecasts, trimmed mean at 2.0 pct y/y Dec 2019, 2.1 pct Dec 2020, 2.2 pct June 2021

sees unemployment at 5.0 pct Dec 2019, 4.9 pct Dec 2020, 4.8 pct June 2021

sees wage price index 2.4 pct y/y Dec 2018, 2.5 pct Dec 2019, 2.6 pct Dec 2020, 2.6 pct June 2021

outlook for business investment positive, see y/y growth 4.8 pct Dec 2019, 4.9 pct Dec 2020

global growth running at solid pace, growth in trade partners seen around trend

recent downturn in business surveys, if sustained, would imply weaker investment, employment

Probability of rate rise or cut more evenly balanced than previously

board does not see strong case to move rates in the near term

board judges progress on inflation, unemployment can be "reasonably expected"

if progress is made, higher rates would be appropriate at some point

might lower rates if there was a sustained rise in unemployment, too low inflation

resilience of household consumption is a "key uncertainty"

unsure whether income growth will rise enough to offset drag from falling house prices

household reaction to fall in home prices is a "significant uncertainty"

labour market remains strong, leading indicators imply above average growth

housing credit conditions tighter than have been for some time