The current Reserve Bank of Australia cash interest rate is 0.25%. Taking into account the 2% inflation factor, the real interest rate has been zero or negative.
According to the Reserve Bank’s analysis, a one percentage point cut in interest rates will push up house prices by 30%. It is estimated that the two interest rate cuts will rebound house prices by 15%. Ray Dalio, the founder of the world’s largest hedge fund and Bridgewater Fund, said in an interview with the Australian reporter: “The characteristics of the contemporary world economic situation are Confluence of four main factors:
First, governments and central banks are limited in their ability to adopt stimulating fiscal and monetary policies;
Second, it is currently at the end of a wave of economic cycles;
Third, there are widespread and acute political and social contradictions within various countries;
Fourth, the conflict between China as a rising power and the United States as a conservative power has intensified.
The world’s wealth and development opportunities have shifted from traditional industrial regions to regions and companies that develop and use new technologies. The change in wealth distribution has contributed to the rise of populism and the division of society. “Under global risk aversion, national debt issued by various countries is worth 12 trillion U.S. dollars, equivalent to 40% of global debt sold at substantially negative interest rates (lower than inflation).
The representative of Australian management and the CEO of Business Council Australia (Business Council Australia), Jennifer Westacott, stated in an article that Australia must make breakthroughs in the following 6 areas to maintain the continuous improvement of the quality of life:
First, increase industrial and commercial investment;
Second, improve infrastructure;
Third, strengthen technical training to keep up with the world’s technological development trend;
Fourth, get rid of bureaucracy and stereotypes that restrict productivity growth;
Fifth, improve energy supply;
Sixth, revise the labor and wage system that is conducive to the development of the enterprise and the interests of employees.
The above six aspects are indeed the key to Australia’s economic development, but the above six aspects are not only at the corporate level, but also involve all aspects of Australia’s entire political economy, such as taxation, government fiscal policies, and labor and wage systems.
https://www.businessinsider.com.au/australia-interest-rates-rising-forecast-banks-2020-8