Reserve Bank of Australia and Economic Slowdown

economic snapshot: But the Reserve Bank of Australia repeated that despite local optimism, uncertainly about the outlook for China and the management of its economic slowdown remained a potential global flashpoint, according to Australian Broadcasting Corporation. In its quarterly economic snapshot, the central bank signalled qualified optimism about the local outlook given a falling jobless rate, low inflation, a lower Australian dollar and evidence the transition out of the mining boom was starting to take hold. "Non-mining business investment is forecast to pick up in the second half of the forecast period, reflecting the improvement in domestic demand," Friday statement said. "There has been a noticeable improvement in labour market conditions that was not anticipated at the time of the previous statement." The official unemployment rate for December fell to 5.8 per cent after peaking at 6.3 per cent during 2015, down by 0.5 per cent. "Also the low growth of wages is likely to have encouraged businesses to employ more people than otherwise," the RBA said. Related Story: ASX closes weaker amid global growth concerns Related Story: Reserve Bank keeps interest rates on hold at 2pc Map: Australia The Reserve Bank has delivered a cautiously upbeat report card on the Australian economy in the face of global financial turmoil. External Link: RBA cautiously upbeat on Australian economy The RBA also pointed to low headline and underlying inflation in addition to lower petrol prices caused by the plunge in global oil prices. However, the RBA said uncertainty about China and concerns about its economy remained a key focus for Australia. "The outlook for China continues to be a key source of uncertainty for the forecasts," the RBA said. "The recent bout of global financial market volatility has been characterised in part by concerns about the evolving balance of risks in China and the ability of Chinese authorities to manage a challenging economic transition. "Any sharp slowing in economic activity in increase in the financial stresses in China could spill over to other economies in the region." The RBA warned that any unexpected fallout from China would "adversely affect commodity prices including those that are important to Australia" such as iron ore. The outlook made no material change to economic growth outlook which it expected to increase gradually over the next two years to "be a bit above the decade average". The RBA expected growth to remain steady at between 2.5 and 3.5 per cent to December 2016, slightly better that the forecast in November with headline inflation of between 2 and 3 per cent for the same period. (news.financializer.com). As reported in the news.