- Yesterday the RBA decided to hold official rates steady at 4.25%, despite warning signs of a slowing economy. Many experts expected a rate cut, which everyone now agrees must come next month. The Australian economy is showing low consumer confidence, struggling retail activity and slowing in new home construction.
The decision has frustrated much of the business community. CommSec economist Craig James suggests that this strategic decision was based more on timing, than whether a rate cut was needed, as the RBA waits for a confirmation of inflation data before making a move.
However it's being alleged that the interest of the Government making a surplus has trumped the needs of a struggling business environment in this case.
- Experts are predicting now that the Australian dollar will move even further upwards toward 108 US cents by June, and 109 by December. The factors include expectations that RBA rates will be cut just once more, US Fed Reserve will keep rates near zero, and CHina will rebound from its soft patch.
- Spain's national debt situation has become "critical", as unemployment hit a new record last month. Debt-to-GDP ration will rise to 79.8% this year, up from 68.5% last year. The EU's limit is 60%.
- Independent grocers around Australia are at the forefront of the business world's looming panic over the struggling with a poor business environment. Struggling to compete with larger supermarkets, the nation's largest grocery wholesaler Metcash is expected to see a 45 % drop in earnings this year, and a cut to around 10% of its workforce. IGA supermarkets are battling a 0.9% deflation.
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