Minutes from July’s Reserve Bank of Australia monetary policy meeting proved encouraging, with the bank seeing signs that the economy is transitioning from public to private demand and even argued that some moderation in Asian economic growth is “desirable”, hinting they expect the economy to remain well-supported despite a likely slowdown in demand from China, the major buyer of its mineral exports. Indeed, Beijing has been actively pushing to slow domestic economic growth amid fears of asset bubbles and runaway inflation. That said, the RBA said it will continue to monitor the extent to which Asia can growth despite lackluster performance in Western economies and remained cautious on the overall global economic landscape, saying the results of EU bank stress tests to be released this week can have a “significant impact” on confidence. On the inflation front, policymakers said they expect the underlying rate of price growth has moderated below 3 percent and promised to monitor incoming data for “material” changes in the outlook going forward.
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