AUSTRALIA’S economic recovery has surpassed all expectations with an “above-trend” expansion likely this year and next, though the country’s central bank is still in no hurry to tighten policy settings, minutes of its April policy meeting showed yesterday.

The Reserve Bank of Australia (RBA) left rates at a record low 0.1 percent at its Apr. 6 meeting while reiterating its commitment to keep policy accommodative for as long as is necessary to pull down unemployment and push inflation higher.

The RBA cut interest rates three times last year, announced a yield curve control (YCC) program to keep three-year government bond yields at 10 basis points and launched a massive quantitative easing program targeting longer term bonds.

The minutes showed the RBA would maintain this supportive policy stance until actual inflation is sustainably within its 2-3 percent target range, a goal it does not expect to meet before 2024.

“Overall, preliminary data suggested that GDP in the March quarter was likely to have recovered further to around its pre-pandemic level, earlier than previously expected,” the minutes showed.

The economy is expected to expand at an “above trend” pace this year and next, the RBA said.

“Despite these generally positive developments, wage and price pressures had remained subdued and were expected to remain so for several years,” according to the minutes.

“The economy had been operating with considerable spare capacity and the unemployment rate was still too high.”

(SD-Agencies)