A leading Australian economist says he believes that interest rates will continue to rise over the coming year, and that the trend of tightening interest rates is proof of a robust economy.
Chris Richardson, director of consultancy Access Economics, says that last week’s unemployment data were a testament to the strength of the Australian economy, but also meant that interest rates were likely to rise.
Mr. Richardson added that he does not expect rates to rise in the immediate future, and that they would remain steady over the next two months.
Unemployment fell to 5.2 per cent in May, while the number of people with jobs rose by 26,900 (0.24 per cent), the Australian Bureau of Statistics (ABS) said on Thursday.
“The job figures are a reminder that Australia’s economy has momentum and strength in a way that the rest of the rich world does not have,” Mr Richardson told AAP on Tuesday.
“I wouldn’t be surprised if the Reserve Bank leaves rates on hold for another month or two, particularly while the air around Europe and its woes is cleared more.
“My essential expectation is that rates continue to rise and that they will rise through the rest of 2010 and a chunk of 2011.”
