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STATEMENT ON MONETARY POLICY – AUGUST 2006
| Contents |
List of tables
Table 2: Changes in Monetary Policy
Table 3: Changes in Major Country Share Prices
Table 4: Change in US Dollar against Other Currencies
Table 5: Australian Dollar against Selected TWI Currencies
Table 8: Fiscal Balance – General Government Sector
Table 9: Labour Market by State
Table 11: Intermediaries' Indicator Lending Rates
Table 12: Housing Loan Interest Rates
Table 13: Financial Aggregates
Table 14: Non-government Bond Issuance by Sector
Table 15: Measures of Consumer Prices
Table 16: Output Prices at Different Stages of Production
Table 17: Median Inflation Expectations
Year-average percentage change(a) |
||||
2004 |
2005 |
2006 |
2007 |
|
Consensus
forecasts (July 2006) |
||||
| United States | 3.9 |
3.2 |
3.5 |
2.8 |
| Euro area | 1.8 |
1.4 |
2.2 |
1.8 |
| Japan | 2.3 |
2.6 |
3.0 |
2.2 |
| China | 10.1 |
9.9 |
9.7 |
8.8 |
| Other east Asia(b) | 5.9 |
4.8 |
5.2 |
4.8 |
| India | 7.3 |
8.2 |
7.6 |
7.2 |
| Latin America | 5.8 |
4.3 |
4.7 |
4.1 |
| Emerging Europe | 6.1 |
5.2 |
5.8 |
5.5 |
| World | 5.3 |
4.7 |
5.0 |
4.6 |
| Australia's trading partners(c) | 4.9 |
4.4 |
4.6 |
4.1 |
| (a) Aggregates weighted by GDP at PPP exchange rates unless otherwise specified | ||||
| (b) Weighted using market exchange rates | ||||
| (c) Weighted using merchandise export shares | ||||
| Sources: CEIC; Consensus Economics; IMF; RBA; Thomson Financial | ||||
|
..................................................................................................................................
 |
Current level Per cent |
Most recent change |
Market expectations for next 6 months |
|
| United States | 5.25 |
↑ Jun 06 |
No change |
| Euro area | 2.75 |
↑ Jun 06 |
↑ 50 bps |
| Japan | 0.25 |
↑ Jul 06 |
↑ 25 bps |
| United Kingdom | 4.50 |
↓ Aug 05 |
↑ 25 bps |
| Canada | 4.25 |
↑ May 06 |
No change |
| New Zealand | 7.25 |
↑ Dec 05 |
No change |
| Sources: central banks; Bloomberg; Reuters | |||
|
..................................................................................................................................
|
Per cent |
|||
Since 2000 peak |
2006 to date |
Since previous Statement |
|
| United States | |||
| – Dow Jones | –5 |
4 |
–2 |
| – S&P 500 | –17 |
2 |
–3 |
| – NASDAQ | –59 |
–6 |
–11 |
| Euro area | |||
| – STOXX | –27 |
4 |
–5 |
| United Kingdom | |||
| – FTSE | –15 |
5 |
–2 |
| Japan | |||
| – TOPIX | –11 |
–5 |
–10 |
| Canada | |||
| – TSE 300 | 5 |
6 |
–2 |
| Source: Bloomberg | |||
|
..................................................................................................................................
|
Per cent |
||
2006 to date |
Since previous Statement |
|
|
|
||
| Sweden | –10 |
–2 |
| United Kingdom | –8 |
–1 |
| Thailand | –8 |
0 |
| Euro area | –8 |
–1 |
| Indonesia | –7 |
4 |
| Switzerland | –7 |
0 |
| Brazil | –6 |
7 |
| South Korea | –5 |
2 |
| Singapore | –5 |
0 |
| Australia | –4 |
1 |
| Philippines | –3 |
0 |
| Malaysia | –3 |
2 |
| Canada | –3 |
2 |
| Japan | –3 |
2 |
| China | –1 |
0 |
| Taiwan | 0 |
4 |
| India | 3 |
4 |
| Mexico | 4 |
1 |
| South Africa | 10 |
15 |
| New Zealand | 10 |
3 |
| Majors TWI | –5 |
1 |
| Broad TWI | –3 |
1 |
| Source: RBA | ||
|
..................................................................................................................................
|
Per cent |
||
2006 |
Since previous |
|
to date |
Statement |
|
| New Zealand | 16 |
3 |
| South Africa | 15 |
15 |
| Taiwan | 5 |
4 |
| US | 5 |
0 |
| China | 3 |
–1 |
| PNG | 3 |
–1 |
| Japan | 2 |
1 |
| Canada | 2 |
3 |
| Philippines | 1 |
0 |
| South Korea | –1 |
2 |
| Singapore | –1 |
0 |
| Switzerland | –2 |
–1 |
| Euro area | –3 |
–1 |
| Indonesia | –3 |
4 |
| UK | –4 |
–2 |
| Sweden | –5 |
–3 |
| TWI | 2 |
1 |
| |
||
| Source: RBA | ||
|
..................................................................................................................................
|
Percentage change |
||||
December qtr 2005 |
March qtr 2006 |
Year to March qtr 2005 |
Year to March qtr 2006 |
|
| |
||||
| Domestic final demand | 1.6 |
0.8 |
3.4 |
5.0 |
| Change in inventories(a) | 0.0 |
0.0 |
–0.2 |
–0.3 |
| GNE(b) | 1.3 |
0.8 |
3.5 |
4.0 |
| Net exports(a) | –0.6 |
0.0 |
–1.7 |
–1.1 |
| GDP | 0.7 |
0.9 |
2.0 |
3.1 |
| Memo item: | ||||
| Real GDP adjusted for changes in terms of trade |
1.3 |
0.7 |
3.4 |
5.1 |
| (a) Contributions to GDP growth | ||||
| (b) Includes the statistical discrepancy | ||||
| Source: ABS | ||||
|
..................................................................................................................................
|
Percentage change |
|||||||
APM |
REIA |
Residex |
ABS |
||||
Jun qtr 2006 |
Year to Jun qtr |
Jun qtr 2006(a) |
Year to Jun qtr |
Jun qtr 2006(b) |
Year to Jun qtr |
Year to Mar qtr |
|
| Sydney | 1.2 |
–0.9 |
.. |
.. |
2.8 |
1.8 |
–3.1 |
| Melbourne | –0.8 |
2.5 |
3.2 |
4.2 |
1.7 |
8.3 |
3.8 |
| Brisbane | 1.4 |
4.4 |
.. |
.. |
1.1 |
4.8 |
2.8 |
| Adelaide | 2.7 |
5.9 |
2.3 |
4.2 |
.. |
.. |
5.3 |
| Perth | 10.1 |
36.6 |
.. |
.. |
8.2 |
28.3 |
28.8 |
| Canberra | 1.3 |
3.4 |
.. |
.. |
0.0 |
4.5 |
1.4 |
| Hobart | 1.0 |
8.0 |
.. |
.. |
.. |
.. |
9.9 |
| Darwin | 6.9 |
20.5 |
.. |
.. |
1.2 |
17.4 |
17.4 |
| Australia | 2.0 |
5.6 |
.. |
.. |
3.1(c) |
9.0(c) |
3.6 |
| (a) Seasonally adjusted by the RBA | |||||||
| (b) Three-month-ended | |||||||
| (c) Excludes Adelaide and Hobart | |||||||
| Sources: ABS; APM; REIA; state REIs; RBA; Residex | |||||||
|
..................................................................................................................................
|
Estimates, $ billion |
||
2005/06 |
2006/07 |
|
| States | ||
| NSW | –0.6 |
–2.5 |
| Victoria | –1.2 |
–0.6 |
| Queensland(b) | 0.7 |
–1.8 |
| WA | 1.4 |
0.5 |
| SA(c) | 0.0 |
–0.2 |
| Tasmania | 0.1 |
–0.1 |
| ACT | –0.1 |
–0.2 |
| NT | –0.1 |
–0.1 |
| Total states | 0.1 |
–4.9 |
| – Per cent of GDP | 0.0 |
–0.5 |
| Federal government | 16.5 |
10.9 |
| – Per cent of GDP | 1.7 |
1.1 |
| Total: | ||
| States and federal | 16.6 |
6.0 |
| – Per cent of GDP | 1.7 |
0.6 |
| (a) ABS Government Finance Statistics basis | ||
| (b) Adjusted for differing funding arrangements for future superannuation liabilities | ||
| (c) As at 2005/06 South Australian Budget Mid-Year Review | ||
| Sources: Australian Treasury; RBA; state Treasuries | ||
|
..................................................................................................................................
|
Per cent |
||||
Employment growth |
Unemployment rate
|
|||
June qtr 2006 |
Year-ended June qtr 2006 |
June qtr 2005 |
June qtr 2006 |
|
| |
||||
| NSW | 0.4 |
0.9 |
5.1 |
5.4 |
| Victoria | 0.9 |
1.4 |
5.4 |
5.1 |
| Queensland | 1.1 |
2.1 |
5.0 |
4.7 |
| WA | 0.3 |
2.5 |
4.8 |
3.6 |
| SA | 0.3 |
0.8 |
5.0 |
5.1 |
| Tasmania | 0.4 |
3.0 |
6.1 |
6.5 |
| Australia | 0.8 |
1.6 |
5.1 |
5.0 |
| Source: ABS | ||||
|
..................................................................................................................................
|
Percentage change; SDR |
||
Three months to July 2006 |
Year to July 2006 |
|
| RBA Index | 1.3 |
17 |
| Rural | 0.1 |
12.7 |
| – Wheat | 4.3 |
30.8 |
| – Beef & veal | 1.2 |
2.1 |
| – Wool | 3.3 |
0.3 |
| Base metals | 11.2 |
74.9 |
| – Aluminium | –5.9 |
38.3 |
| – Copper | 18.7 |
110.2 |
| – Nickel | 42.8 |
76.3 |
| Other resources | –2.1 |
3.9 |
| – Coking coal(a) | –7.2 |
12.9 |
| – Steaming coal(a) | –2.1 |
1.0 |
| – Iron ore(a) | –8.5 |
–2.9 |
| – Gold | 1.6 |
46.6 |
| Memo item: | ||
| Oil in US$(b) | 6.9 |
26.7 |
| (a) Latest available data are for May. | ||
| (b) Oil prices are not included in the RBA Index. | ||
| Sources: ABS; AWB; AWEX; Bloomberg; Meat and Livestock Australia; RBA | ||
|
..................................................................................................................................
|
Per cent |
||
Current level (1 August) |
Change since end April |
|
| Variable rates – household | ||
| Housing: | ||
| – Major banks' standard variable | 7.55 |
+0.25 |
| – Major banks' basic variable | 7.00 |
+0.25 |
| – Mortgage managers' standard variable | 7.15 |
+0.25 |
| – Mortgage managers' basic variable | 6.55 |
+0.25 |
| Other household: | ||
| – Home equity | 7.70 |
+0.25 |
| – Margin loans | 8.50 |
+0.20 |
| – Standard credit cards | 17.00 |
+0.25 |
| – Low-rate/no-frills credit cards | 11.00 |
–0.10 |
| Variable rates – small business | ||
| Residential security: | ||
| – Overdraft | 8.45 |
+0.25 |
| – Term loan | 7.80 |
+0.25 |
| Other security: | ||
| – Overdraft | 9.35 |
+0.25 |
| – Term loan | 8.40 |
+0.25 |
| Variable rates – large business | ||
| – Overdraft | 9.35 |
+0.25 |
| Fixed rates (3 years) | ||
| – Housing | 7.20 |
+0.35 |
| – Small business | 8.10 |
+0.45 |
| – Swap rate | 6.40 |
+0.30 |
| Source: RBA | ||
|
..................................................................................................................................
|
Per cent |
|||
Average January 1993 to July 2006 |
July 2006 |
August 2006 |
|
| Cash rate | 5.50 |
5.75 |
6.00 |
| Standard variable indicator rate | 7.75 |
7.55 |
7.80(a) |
| Actual rate paid by new borrowers | 7.50 |
6.95 |
7.20(a) |
| (a) Assuming full pass-through of the August tightening | |||
| Source: RBA | |||
|
..................................................................................................................................
|
Percentage change |
|||
Average monthly growth |
|||
December qtr 2005 |
March qtr 2006 |
June qtr 2006 |
|
| |
|||
| Total credit | 1.1 |
1.3 |
1.2 |
| Household | 1.0 |
1.1 |
1.1 |
| – Housing | 1.1 |
1.2 |
1.2 |
| – Personal | 0.4 |
0.8 |
1.0 |
| Business | 1.2 |
1.4 |
1.2 |
| Broad money | 0.3 |
1.1 |
0.7 |
| Source: RBA | |||
|
..................................................................................................................................
|
$ billion |
|||||
| Sector | 2003 |
2004 |
2005 |
2006 |
|
March quarter |
June quarter |
||||
| Bond issues by Australian entities | |||||
| Onshore | |||||
| Financial institutions | 9.9 |
14.3 |
20.9 |
4.5 |
5.9 |
| Non-financial corporations | 5.6 |
8.0 |
9.3 |
1.9 |
2.4 |
| Asset-backed | 20.7 |
25.0 |
32.2 |
7.9 |
14.8 |
| Total | 36.1 |
47.3 |
62.4 |
14.3 |
23.1 |
| Offshore | |||||
| Financial institutions | 51.5 |
64.9 |
52.2 |
25.4 |
12.2 |
| Non-financial corporations | 14.7 |
13.6 |
16.5 |
0.6 |
1.7 |
| Asset-backed | 24.3 |
29.8 |
25.6 |
6.2 |
5.3 |
| Total | 90.5 |
108.2 |
94.4 |
32.2 |
19.2 |
| Total | 126.6 |
155.5 |
156.8 |
46.4 |
42.4 |
| A$ bond issues by non-resident entities | |||||
| Onshore | 7.1 |
21.3 |
26.2 |
15.9 |
4.2 |
| Offshore | 24.8 |
21.5 |
12.0 |
3.7 |
2.6 |
| Total | 31.9 |
42.9 |
38.2 |
19.6 |
6.7 |
| Source: RBA | |||||
|
..................................................................................................................................
|
Percentage change |
||||
Quarterly |
Year-ended |
|||
March quarter 2006 |
June quarter 2006 |
March quarter 2006 |
June quarter 2006 |
|
| CPI | 0.9 |
1.6 |
3.0 |
4.0 |
| – Tradables | 0.8 |
2.7 |
2.8 |
4.8 |
| – Tradables (ex food and petrol) | 0.4 |
0.1 |
0.3 |
0.2 |
| Non-tradables | 0.9 |
0.8 |
3.1 |
3.4 |
| Underlying measures | ||||
| Weighted median | 0.7 |
0.9 |
2.8 |
3.0 |
| Trimmed mean | 0.8 |
0.9 |
2.6 |
2.8 |
| CPI ex volatile items(a) | 0.8 |
0.6 |
2.2 |
2.4 |
| (a) Volatile items are fruit, vegetables and petrol | ||||
| Sources: ABS; RBA | ||||
|
..................................................................................................................................
|
Percentage change |
||
June quarter 2006 |
Year to June quarter 2006 |
|
| Preliminary | 3.1 |
9.4 |
| – Domestically produced | 2.7 |
8.7 |
| – Imported | 4.9 |
13.8 |
| – Excluding oil | 2.2 |
6.7 |
| Intermediate | 2.8 |
8.0 |
| – Domestically produced | 2.6 |
7.5 |
| – Imported | 3.8 |
10.8 |
| – Excluding oil | 2.1 |
6.2 |
| Final(a) | 1.6 |
4.5 |
| – Domestically produced | 1.8 |
4.9 |
| – Imported | 0.7 |
2.3 |
| – Excluding oil | 1.0 |
3.7 |
| (a) Excluding exports | ||
| Sources: ABS; RBA | ||
|
..................................................................................................................................
|
Per cent |
|||||
Year to December 2006 |
Year to December 2007 |
||||
February 2006 |
May 2006 |
August 2006 |
May 2006 |
August 2006 |
|
| Market economists(a) | 2.8 |
2.9 |
3.6 |
2.6 |
2.6 |
| Union officials(b) | 3.0 |
3.3 |
4.2 |
3.2 |
4.1 |
| (a) RBA survey | |||||
| (b) Workplace Research Centre | |||||
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