A top Australian central bank official said Tuesday
that the resource-rich nation will need to find new drivers of growth as
a mining investment boom that has underpinned the economy is fading.
"With the peak in mining investment now coming into view, it is not
surprising that attention is turning to the question of what forms of
activity might pick up, where the future jobs might come from, and what
combination of interest rates and exchange rates might keep the overall
economy on an even keel," Reserve Bank of Australia Deputy Governor
Philip Lowe said at a conference in Hobart.
In May, Mr. Lowe referred in a speech to a "once-in-a-century boom in
mining investment". But the industry is now feeling the pain of
weakening global demand as Europe's woes play out and China's economy
slows. In recent weeks, mining companies have scrapped big investment
plans, shuttered mines and laid off thousands of workers.
The RBA last week surprised economists by cutting its benchmark lending
rate by 0.25 percentage point to 3.25%, a level last seen in late 2009,
reacting to declines in commodity prices and slowing growth. Most
economists had expected no change.
It now expects the peak in resource investment to occur next year, possibly at a lower level than earlier expected.
Mr. Lowe said Tuesday that concerns about world growth and signs the
country's job market has softened recently prompted last week's cut in
interest rates.
"Given the outlook for contained inflation, the board judged at its
meeting last week that it was appropriate for the stance of monetary
policy to be a little more accommodative," Mr. Lowe said.
