The Federal Government’s Mid-Year Economic Forecast delivered a brighter economic future for Australia, signaling interest rates are on their way up.
The economic outlook showed the economy is expected to grow 1.5 percent in 2009/10, ending the case for low interest rates, according to Commonwealth Bank chief economist Michael Blythe.
‘‘It shows you how quickly things can change. The prospects for the economy are much brighter,’’ Blythe said. ‘‘The super low level of rates are no longer required.”
The Reserve Bank is widely tipped to lift the cash rate by a further 25 basis points to 3.5 percent when it meets in Sydney today.
‘‘The improved economic outlook reflects the effectiveness of monetary and fiscal stimulus in Australia, and the stronger global recovery,’’ Treasurer Wayne Swan said in a statement. ‘‘Despite the improved outlook the global recession has still had a marked effect on the Australian economy and challenges remain.’’
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