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RESERVE BANK OF AUSTRALIA

Statement on Monetary Policy – February 2008

List of tables

Table 1: World GDP

Table 2: Changes in Monetary Policy

Table 3: Changes in Global Share Prices

Table 4: Changes in the US Dollar against Other Currencies

Table 5: Australian Dollar against Selected TWI Currencies

Table 6: Demand and Output

Table 7: House Prices

Table 8: Volume of Farm Production

Table 9: Labour Market by State

Table 10: Financial Aggregates

Table 11: Intermediaries’ Variable Household Lending Rates

Table 12: Intermediaries’ Variable Business Lending Rates

Table 13: Measures of Consumer Prices

Table 14: Median Inflation Expectations

Table 15: Output and Inflation Forecasts

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Table 1: World GDP
Year-average percentage change(a)
  2006 2007 2008
  estimates IMF forecasts(d)
(a) Aggregates weighted by GDP at PPP exchange rates unless otherwise specified. PPP weights have been updated to reflect the most recent data from the International Comparison Program.
(b) Weighted using GDP at market exchange rates
(c) Weighted using merchandise export shares
(d) Forecasts from the 29 January World Economic Outlook (WEO) Update where available, otherwise lowest of January Consensus and October WEO
Sources: CEIC; Consensus Economics; IMF; RBA; Thomson Financial
United States 2.9 2.2 1.5
Euro area 2.9 2.6 1.6
Japan 2.4 1.9 1.5
China 11.1 11.4 10.0
Other east Asia(b) 5.4 5.6 4.9
India 9.6 8.6 8.2
World 5.0 4.9 4.1
Australia’s trading partners(c) 5.2 5.1 4.4
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Table 2: Changes in Monetary Policy
  Current level
Per cent		 Most recent
change		 Expectations for
next 6 months
Sources: Bloomberg; central banks; Reuters
United States 3.00 ↓ Jan 08 ↓ 100 bps
Euro area 4.00 ↑ Jun 07 ↓ 50 bps
Japan 0.50 ↑ Feb 07 No change
United Kingdom 5.50 ↓ Dec 07 ↓ 75 bps
Canada 4.00 ↓ Jan 08 ↓ 75 bps
New Zealand 8.25 ↑ Jul 07 No change
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Table 3: Changes in Global Share Prices
Per cent
  Since 2000 peak Past year Since previous
Statement
Source: Bloomberg
United States
– Dow Jones 4 −4 −8
– S&P 500 −13 −9 −10
– NASDAQ −55 −9 −17
Euro area
– STOXX −23 −13 −15
United Kingdom
– FTSE −15 −8 −8
Japan
– TOPIX −26 −25 −17
Canada
– TSE 300 13 −2 −9
Australia
– ASX 200 61 −5 −16
MSCI Emerging Asia 52 18 −17
MSCI Latin America 245 19 −6
MSCI World −7 −8 −11
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Table 4: Changes in the US Dollar against Other Currencies
Per cent
  Past year Since previous
Statement
Sources: Bloomberg; Board of Governors of the Federal Reserve System; Reuters
Philippines −17 −7
Brazil −16 0
Canada −15 8
Australia −13 5
New Zealand −13 −1
Euro area −11 0
Switzerland −11 −3
Japan −11 −5
India −10 0
Sweden −8 2
Thailand −8 −3
Singapore −8 −2
Malaysia −8 −3
China −7 −4
Taiwan −3 −1
Mexico −1 0
UK 1 7
South Korea 1 4
Indonesia 2 1
South Africa 7 18
Majors TWI −12 2
Broad TWI −9 1
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Table 5: Australian Dollar against Selected TWI Currencies
Percentage change
  Past year Since
previous
Statement
 Deviation
from post-float
average
Source: RBA
South Africa 24 14 66
Indonesia 18 −2 146
South Korea 17 1 28
UK 16 4 3
US 15 −3 25
Taiwan 12 −4 28
PNG 8 −3 96
China 7 −6 40
Singapore 7 −5 1
Sweden 6 −1 9
Euro area 2 −3 −8
Japan 2 −8 0
Switzerland 2 −6 −9
New Zealand −1 −5 −8
Canada −2 5 −4
TWI 8 −4 18
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Table 6: Demand and Output
Percentage change
  June quarter
2007		 September quarter
2007		 Year to September
quarter 2007
(a) Contributions to GDP growth
(b) Adjusted for the statistical discrepancy
Sources: ABS; RBA
Domestic final demand 1.4 0.8 5.5
Change in inventories(a) −0.5 0.3 1.1
GNE(b) 0.9 1.0 6.0
Net exports(a) −0.2 −0.1 −1.9
GDP 0.7 1.0 4.3
Non-farm GDP 1.0 0.6 4.5
Farm GDP −13.0 24 −6.9
Memo item:
Real GDP adjusted for changes
in the terms of trade		 0.7 0.8 4.9
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Table 7: House Prices
Percentage change
  September
quarter

 December
quarter

 Year to
December
quarter
Source: ABS
Sydney 1.8 2.4 8.0
Melbourne 4.8 3.4 18.1
Brisbane 4.1 5.4 21.6
Adelaide 5.1 6.0 20.2
Perth 1.6 0.9 1.1
Canberra 3.3 4.4 14.3
Hobart 2.2 3.7 11.1
Darwin 4.3 2.3 11.1
Australia 3.2 3.2 12.3
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Table 8: Volume of Farm Production
Per cent
  Share of gross production Growth
2005/06 2006/07 2007/08(f)
(a) Gross farm production less farm inputs
Sources: ABARE; ABS; RBA
Crops 45 −31 8
Cereals 17 −61 37
Non-cereal crops 29 −14 0
Livestock products 43 −5 −1
Farm GDP(a) −23 2
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Table 9: Labour Market by State
Trend measure, Per cent
  Employment growth Unemployment rate
Year to December 2007 December 2006 December 2007
Source: ABS
NSW 1.9 5.0 4.7
Victoria 3.1 4.8 4.6
Queensland 2.9 4.1 3.7
WA 3.6 3.2 3.3
SA 2.3 5.2 5
Tasmania 2.9 5.9 5.4
Australia 2.6 4.6 4.4
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Table 10: Financial Aggregates
Average monthly growth, Per cent
  March
quarter
2007		 June
quarter
2007		 September
quarter
2007		 December
quarter
2007
Source: RBA
Total credit 1.2 1.4 1.2 1.3
Household 1.0 1.2 0.7 0.9
– Owner-occupier housing 1.0 1.1 0.8 0.9
– Investor housing 0.9 1.0 0.7 0.7
– Personal 1.0 2.2 0.0 1.0
Business 1.6 1.8 2.1 1.9
Broad money 1.2 1.5 1.0 2.2
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Table 11: Intermediaries’ Variable Household Lending Rates
Per cent
  Level as at
31 Jan 2008		 Change since:
End Oct 2007 End Jul 2007
Sources: Cannex; Perpetual; RBA
Cash rate 6.75 0.25 0.50
Housing loans
Prime full-doc
Banks 8.07 0.40 0.65
Credit unions and building societies 7.89 0.34 0.59
Mortgage originators 8.07 0.34 0.69
Prime low-doc
Banks 8.39 0.36 0.71
Mortgage originators 8.53 0.36 0.78
Non-conforming 10.59 0.56 1.51
Personal loans
Margin loans 9.66 0.33 0.69
Standard credit cards 18.57 0.39 0.78
Low-rate credit cards 11.76 0.41 0.60
Unsecured term loans 13.89 0.46 1.28
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Table 12: Intermediaries’ Variable Business Lending Rates
Per cent
  Level as at
31 Jan 2008		 Change since:
End Oct 2007 End Jul 2007
(a) RBA estimate
Sources: APRA; Cannex; RBA
Cash rate 6.75 0.25 0.50
Small business
Term loans
Residentially secured 9.07 0.50 0.77
Other security 9.67 0.50 0.78
Overdraft
Residentially secured 9.79 0.57 0.85
Other security 10.69 0.57 0.85
Average actual rate(a) 9.31 0.50 0.73
Large business
Average actual rate(a) 7.64 0.42 0.73
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Table 13: Measures of Consumer Prices
Percentage change
  Quarterly Year-ended
September
quarter 2007		 December
quarter 2007		 September
quarter 2007		 December
quarter 2007
(a) Volatile items are fruit, vegetables and petrol
Sources: ABS; RBA
CPI 0.7 0.9 1.9 3.0
– Tradables 0.2 0.3 −0.3 1.4
– Tradables (ex food
and petrol)		 0.0 0.0 0.6 0.8
– Non-tradables 1.1 1.3 3.5 4.1
Underlying measures        
Weighted median 1.0 1.1 3.1 3.8
Trimmed mean 0.9 1.0 2.9 3.4
CPI ex volatile items(a) 0.7 1.0 2.6 3.0
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Table 14: Median Inflation Expectations
Per cent
  Year to December 2008 Year to December 2009
August
2007		 November
2007		 February
2008		 February
2008
(a) RBA survey
(b) Workplace Research Centre
Market economists(a) 2.7 2.7 3.0 2.7
Union officials(b) 3.0 3.0 3.5 3.4
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Table 15: Output and Inflation Forecasts(a)
Percentage change over year to quarter shown
  Sep
2007		 Dec
2007		 June
2008		 Dec
2008		 June
2009		 Dec
2009		 June
2010
(a) Actual GDP data to September 2007 and actual inflation data to December 2007. Underlying inflation refers to the average of trimmed mean and weighted median inflation. For the forecast period, technical assumptions include A$ at US$0.89, TWI at 69, cash rate at 7.0 per cent, and WTI crude oil price at US$86 per barrel and Tapis crude oil price at US$90 per barrel.
Sources: ABS; RBA
GDP 4.3 3½ 3¼ 3¼ 3 3 3
Non-farm GDP 4.5 3¾ 2¾ 2¾ 2¾ 3 3
Consumer price index 1.9 3.0 3½ 3½ 3¼ 3¼ 3
Underlying inflation 3.0 3.6 3¾ 3½ 3¼ 3¼ 3
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