Australian Economic Targets

Readers Question: What is Australia’s target growth rate? (2008/09)

Given the global slowdown, Australia will probably just trying to survive the global economic downturn and avoid a prolonged recession

Unfortunately, various factors are negatively impact the Australian economy.

• Fall in commodity prices effects Australian economy
• Australian house prices have been booming are now falling
• Global credit crunch
• Unemployment forecast to rise

In the Long term Australian Monetary policy has the state aim of:

(a)   the stability of the currency of Australia;
(b)   the maintenance of full employment in Australia; and
(c)   the economic prosperity and welfare of the people of Australia.”

Since 1993, these objectives have found practical expression in a target for consumer price inflation, of 2-3 per cent per annum. Monetary policy aims to achieve this over the medium term and, subject to that, to encourage strong and sustainable growth in the economy. Controlling inflation preserves the value of money. In the long run, this is the principal way in which monetary policy can help to form a sound basis for long-term growth in the economy.

• Reserve Bank of Australia