STATEMENT ON MONETARY POLICY – AUGUST 2008
List of tables
Table 1: World GDP
Table 2: Changes in Monetary Policy
Table 3: Changes in Emerging Market Policy Interest Rates
Table 4: Change in Major Country Share Prices
Table 5: Change in US Dollar against Other Currencies
Table 6: Australian Dollar against Selected TWI Currencies
Table 7: Demand and Output
Table 8: National House Prices
Table 9: Fiscal Balance – General Government Sector
Table 10: Labour Market by State
Table 11: Largest Falls in Australian Equities since 1900
Table 12: Earnings Growth
Table 13: Credit Aggregates
Table 14: Intermediaries’ Variables Lending Rates
Table 15: Measures of Consumer Prices
Table 16: Median Inflation Expectations
Table 17: Output and Inflation Forecasts
..................................................................................................................................  |
Boxes
Table B1: Monoline Ratings
.................................................................................................................................. |
Table 1: World GDP
Year-average percentage change(a)
|
2006 |
2007 |
2008 |
2009 |
|
|
|
|
|
|
|
IMF forecasts(d) |
|
| United States |
2.9 |
2.2 |
1.3 |
0.8 |
| Euro area |
2.9 |
2.7 |
1.7 |
1.2 |
| Japan |
2.4 |
2.1 |
1.5 |
1.5 |
| China |
11.6 |
11.9 |
9.7 |
9.8 |
| Other east Asia(b) |
5.5 |
5.8 |
4.7 |
4.8 |
| India |
9.8 |
9.3 |
8.0 |
8.0 |
| World |
5.1 |
5.0 |
4.1 |
3.9 |
| Australia’s trading partners(c) |
5.1 |
5.4 |
4.2 |
4.2 |
|
| (a) Aggregates weighted by GDP at PPP exchange rates unless otherwise specified |
| (b) Weighted using GDP at market exchange rates |
| (c) Weighted using merchandise export shares |
| (d) Forecasts from the 18 July World Economic Outlook (WEO) Update |
| Sources: CEIC; IMF; RBA; Thomson Reuters |
.................................................................................................................................. |
Table 2: Changes in Monetary Policy
|
Current level
Per cent |
Most recent
change |
Expectations for
next 6 months |
|
| United States |
2.00 |
↓ |
Apr 08 |
↑ 25 bps |
| Euro area |
4.25 |
↑ |
Jul 08 |
No change |
| Japan |
0.50 |
↑ |
Feb 07 |
No change |
| United Kingdom |
5.50 |
↓ |
Apr 08 |
No change |
| Canada |
3.00 |
↓ |
Apr 08 |
↓ 25 bps |
| New Zealand |
8.00 |
↓ |
Jul 08 |
↓ 75 bps |
|
| Sources: Bloomberg; Thomson Reuters; central banks |
.................................................................................................................................. |
Table 3: Changes in Emerging Market Policy Interest Rates
|
Increase since
previous Statement
Basis points |
Current level
Per cent |
|
| Brazil |
125 |
13.00 |
| Chile |
100 |
7.25 |
| Hungary |
25 |
8.50 |
| India |
125 |
9.00 |
| Indonesia |
75 |
9.00 |
| Israel |
75 |
4.00 |
| Mexico |
50 |
8.00 |
| Philippines |
75 |
5.75 |
| Poland |
25 |
6.00 |
| Russia |
50 |
11.00 |
| South Africa |
50 |
12.00 |
| Taiwan |
12½ |
3.63 |
| Thailand |
25 |
3.50 |
| Turkey |
150 |
16.75 |
|
| Sources: Bloomberg; central banks |
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Table 4: Change in Major Country Share Prices
Per cent
|
Since recent
peak |
Since previous
Statement |
|
| United States |
|
|
| – Dow Jones |
–18 |
–9 |
| – S&P 500 |
–18 |
–7 |
| – NASDAQ |
–17 |
–2 |
| Euro area |
|
|
| – STOXX |
–28 |
–14 |
| United Kingdom |
|
|
| – FTSE |
–19 |
–12 |
| Japan |
|
|
| – TOPIX |
–30 |
–8 |
| Canada |
|
|
| – TSE 300 |
–11 |
–6 |
| Australia |
|
|
| – ASX 200 |
–27 |
–12 |
| MSCI Emerging Asia |
–30 |
–18 |
| MSCI Latin America |
–22 |
–18 |
| MSCI World |
–20 |
–10 |
| – Financials |
–35 |
–15 |
|
| Source: Bloomberg |
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Table 5: Change in US Dollar against Other Currencies
Per cent
|
2007 |
Year to date |
Since previous Statement |
|
| Brazil |
–17 |
–17 |
–6 |
| Philippines |
–16 |
–4 |
3 |
| Canada |
–14 |
–1 |
4 |
| India |
–11 |
4 |
1 |
| Euro area |
–10 |
–11 |
0 |
| Australia |
–10 |
–6 |
3 |
| New Zealand |
–8 |
6 |
9 |
| Switzerland |
–7 |
–11 |
0 |
| China |
–7 |
–10 |
–2 |
| Sweden |
–6 |
–9 |
1 |
| Thailand |
–6 |
–1 |
6 |
| Singapore |
–6 |
–9 |
1 |
| Malaysia |
–6 |
–6 |
3 |
| Japan |
–6 |
–8 |
5 |
| South Africa |
–2 |
5 |
–2 |
| United Kingdom |
–1 |
4 |
0 |
| Taiwan |
0 |
–6 |
0 |
| South Korea |
1 |
10 |
–2 |
| Mexico |
1 |
–9 |
–6 |
| Indonesia |
5 |
–2 |
–2 |
| Majors TWI |
–11 |
–6 |
2 |
| Broad TWI |
–8 |
–6 |
0 |
|
| Sources: Bloomberg; Board of Governors of the Federal Reserve System; Thomson Reuters |
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Table 6: Australian Dollar against Selected TWI Currencies
Percentage change
|
Past year |
Since previous Statement |
Deviation from post-float average |
|
| South Korea |
18 |
–3 |
38 |
| New Zealand |
13 |
5 |
3 |
| South Africa |
12 |
–5 |
59 |
| United Kingdom |
11 |
–2 |
6 |
| United States |
7 |
–3 |
26 |
| Canada |
6 |
0 |
2 |
| Indonesia |
5 |
–4 |
138 |
| Taiwan |
0 |
–2 |
25 |
| Japan |
–3 |
0 |
5 |
| Singapore |
–3 |
–1 |
0 |
| Sweden |
–3 |
–2 |
5 |
| China |
–3 |
–5 |
35 |
| PNG |
–5 |
–8 |
80 |
| Euro area |
–5 |
–3 |
–11 |
| Switzerland |
–6 |
–3 |
–11 |
| TWI |
2 |
–2 |
19 |
|
| Sources: RBA; Thomson Reuters; WM/Reuters |
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Table 7: Demand and Output
Percentage change
|
December
quarter 2007 |
March quarter
2008 |
Year to March
quarter 2008 |
|
| Domestic final demand |
1.4 |
0.9 |
4.8 |
| GNE(a) |
1.6 |
1.3 |
5.6 |
| Net exports(b) |
−1.0 |
−0.7 |
−2.1 |
| GDP |
0.7 |
0.6 |
3.6 |
| Non-farm GDP |
0.6 |
0.7 |
3.6 |
| GDP adjusted for changes |
|
|
|
| in the terms of trade |
0.9 |
0.8 |
3.9 |
|
| (a) Adjusted for the statistical discrepancy |
| (b) Contributions to GDP growth |
| Sources: ABS; RBA |
.................................................................................................................................. |
Table 8: National House Prices
Percentage change
|
March quarter 2008 |
June quarter 2008 |
Year to June quarter 2008 |
|
| ABS |
0.4 |
−0.3 |
8.2 |
| RP Data-Rismark |
1.1 |
–1.5 |
6.2 |
| APM |
0.8 |
−1.4 |
6.8 |
|
| Sources: ABS; APM; RBA; RP Data-Rismark |
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Table 9: Fiscal Balance – General Government Sector(a)
Estimates, $billion
|
2007/08 |
2008/09 |
|
| General government |
|
|
| Federal government |
20.4 |
23.1 |
| – Per cent of GDP |
1.8 |
1.9 |
| State governments |
−4.3 |
−6.2 |
| – Per cent of GDP |
−0.4 |
−0.5 |
| Total (federal and state) |
16.2 |
16.9 |
| – Per cent of GDP |
1.4 |
1.4 |
| Public trading enterprises |
|
|
| (capital spending) |
|
|
| States |
20.1 |
27.2 |
| – Per cent of GDP |
1.8 |
2.3 |
|
| (a) ABS Government Finance Statistics basis
|
| Sources: Australian Treasury; RBA; state Treasuries |
.................................................................................................................................. |
Table 10: Labour Market by State
Trend measure, per cent
|
Employment growth |
Unemployment rate |
|
Year to July 2008 |
July 2008 |
|
| NSW |
2.0 |
4.7 |
| Victoria |
1.5 |
4.6 |
| Queensland |
2.7 |
3.8 |
| WA |
2.7 |
3.3 |
| SA |
2.7 |
4.8 |
| Tasmania |
4.1 |
4.3 |
| Australia |
2.3 |
4.3 |
|
| Source: ABS |
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Table 11: Largest Falls in Australian Equities since 1900
|
Peak to trough |
Duration |
|
(per cent) |
(months) |
|
| 1973 |
–49 |
22 |
| 1929 |
–45 |
24 |
| 1987 |
–45 |
5 |
| 1981 |
–32 |
11 |
| 1970 |
–31 |
20 |
| 1951 |
–29 |
10 |
| 2007 |
–27 |
8 |
| 1937 |
–26 |
59 |
|
| Sources: ASX; Bloomberg; RBA |
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Table 12: Earnings Growth
Per cent
|
Average |
Analysts’ forecasts |
|
|
|
|
2002/03–2006/07 |
2007/08 |
2008/09 |
2009/10 |
|
| Resources |
29 |
0 |
49 |
18 |
| Financials |
8 |
–2 |
4 |
7 |
| Other |
17 |
7 |
2 |
8 |
| ASX 200 |
15 |
1 |
16 |
11 |
|
| Sources: RBA; Thomson Reuters |
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Table 13: Credit Aggregates
Average monthly growth, per cent
|
September quarter 2007 |
December quarter 2007 |
March quarter 2008 |
June quarter 2008 |
|
| Total credit |
1.1 |
1.3 |
0.8 |
0.5 |
| Household |
0.7 |
0.9 |
0.8 |
0.6 |
| – Owner-occupier housing |
0.8 |
0.9 |
1.0 |
0.7 |
| – Investor housing |
0.7 |
0.7 |
0.7 |
0.6 |
| – Personal |
0.0 |
1.2 |
0.0 |
0.1 |
| Business |
1.9 |
1.8 |
1.0 |
0.3 |
|
| Source: RBA |
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Table 14: Intermediaries’ Variable Lending Rates
Per cent
|
Current level |
Change since: |
|
|
|
|
6 August 2008 |
End April 2008 |
End July 2007 |
|
| Cash rate |
7.25 |
0.00 |
1.00 |
| Housing loans |
|
|
|
| Prime-full doc |
|
|
|
| Banks |
8.98 |
0.18 |
1.55 |
| CUBS |
8.83 |
0.17 |
1.46 |
| Mortgage originators |
9.14 |
0.21 |
1.76 |
| Prime low-doc |
|
|
|
| Banks |
9.46 |
0.23 |
1.70 |
| Mortgage originators |
9.79 |
0.30 |
1.99 |
| Non-conforming |
11.71 |
0.15 |
2.09 |
| Personal loans |
|
|
|
| Margin loans |
10.54 |
0.14 |
1.57 |
| Standard credit cards |
19.66 |
0.14 |
1.88 |
| Low-rate credit cards |
12.88 |
0.33 |
1.72 |
| Unsecured term loans |
14.85 |
0.26 |
2.23 |
| Small business |
|
|
|
| Term loans |
|
|
|
| Residentially secured |
10.10 |
0.24 |
1.80 |
| Other security |
10.69 |
0.23 |
1.80 |
| Overdraft |
|
|
|
| Residentially secured |
10.88 |
0.26 |
1.94 |
| Other security |
11.78 |
0.26 |
1.94 |
| Average actual rate(a) |
10.21 |
0.24 |
1.57 |
| Large business |
|
|
|
| Average actual rate(a) |
9.22 |
0.15 |
1.66 |
|
| (a) RBA estimate for end of July
|
| Sources: ABS; APRA; RBA |
.................................................................................................................................. |
Table 15: Measures of Consumer Prices
Percentage change
|
Quarterly |
Year-ended |
|
|
|
|
March quarter 2008 |
June quarter 2008 |
March quarter 2008 |
June quarter 2008 |
|
| CPI |
1.3 |
1.5 |
4.2 |
4.5 |
| – Tradables |
0.8 |
1.5 |
3.3 |
2.9 |
| – Tradables (ex food and petrol) |
–0.2 |
1.1 |
0.6 |
1.0 |
| – Non-tradables |
1.7 |
1.4 |
5.0 |
5.6 |
| Underlying measures |
|
|
|
|
| Weighted median |
1.3 |
1.0 |
4.4 |
4.5 |
| Trimmed mean |
1.2 |
1.2 |
4.0 |
4.3 |
| CPI ex volatile items(a) |
1.2 |
1.3 |
3.6 |
4.2 |
|
| (a) Volatile items are fruit, vegetables and petrol |
| Sources: ABS; RBA |
.................................................................................................................................. |
Table 16: Median Inflation Expectations
Per cent
|
Year to June 2009 |
Year to June 2010 |
|
|
|
|
February 2008 |
May 2008 |
August 2008 |
May 2008 |
August 2008 |
|
| Market economists(a) |
2.8 |
3.0 |
3.3 |
2.8 |
2.8 |
| Union officials(b) |
3.5 |
4.0 |
4.0 |
3.5 |
3.6 |
|
| (a) RBA survey |
| (b) Workplace Research Centre |
.................................................................................................................................. |
Table 17: Output and Inflation Forecasts(a)
Percentage change over year to quarter shown
|
Dec
2007 |
Mar
2008 |
June
2008 |
Dec
2008 |
June
2009 |
Dec
2009 |
June
2010 |
Dec
2010 |
|
| GDP |
4.3 |
3.6 |
2¾ |
2 |
2¼ |
2½ |
2½ |
2¾ |
| Non-farm GDP |
4.2 |
3.6 |
2½ |
1½ |
1¾ |
2½ |
2½ |
2¾ |
| CPI |
3.0 |
4.2 |
4.5 |
5 |
3¾ |
3¼ |
3 |
2¾ |
| Underlying inflation |
3.6 |
4.2 |
4.4 |
4½ |
3¾ |
3¼ |
3 |
2¾ |
|
| (a) Actual GDP data to March 2008 and actual inflation data to June 2008. Underlying inflation refers to the average of trimmed mean and weighted median inflation. For the forecast period, technical assumptions include A$ at US$0.91, TWI at 70, cash rate at 7.25 per cent, and WTI crude oil price at US$118 per barrel and Tapis crude oil price at US$122 per barrel. |
| Sources: ABS; RBA |
.................................................................................................................................. |
Table B1: Monoline Ratings
|
Market share |
2007 |
Current |
|
|
|
|
|
Per cent |
|
S&P |
Moody’s |
Fitch |
|
| MBIA |
37 |
AAA |
AA |
A2 |
– |
| Ambac |
25 |
AAA |
AA |
Aa3 |
– |
| FSA |
17 |
AAA |
AAA |
Aaa |
AAA |
| FGIC |
11 |
AAA |
BB |
B1 |
CCC |
| XL/Syncora |
9 |
AAA |
BBB- |
B2 |
CCC |
| Assured |
1 |
AAA |
AAA |
Aaa |
AAA |
|
| Sources: Fitch; Moody’s; RBA; Standard & Poor’s |
|
