Case for interest rates cut steadily building: Shane Oliver

Jonathan ChancellorAugust 3, 2011

AMP Capital Investors chief economist Dr Shane Oliver views the global outlook as looking softer than the Reserve Bank of Australia has been assuming.

“This combined with a continuing run of very weak economic indicators in Australia highlights why it would be a major mistake to raise interest rates any time soon.

“In fact, the case is steadily building that the next move in the cash rate will be down,” Oliver says.

Oliver says the global malaise affects Australia via three key channels: the direct impact on business and consumer confidence, the financial markets and trade.

“While demand for Australian exports remains strong, the risk is the weakness in Europe and the US adversely affects growth in China and Asia which then reduces demand for Australian exports.

“So far there is no clear evidence of this, but it is worth keeping an eye on,” Oliver says.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Editor's Picks

City Beat January 2025: Sydney property market cooldown slows as new apartment pipeline ramps up
26 Vista Street, Surfers Paradise apartment development, hits 70 per cent sold
Latent Defects Insurance 101: What is the Technical Inspection Service (TIS) Program
City Beat January 2025: Gold Coast property values continue to grow as off the plan enquiries hit near 12-month high
Live parkside in Melbourne for under $500,000