Reserve Bank lowers outlook for Australian economy

The Reserve Bank of Australia (RBA) has lowered its gross domestic product (GDP) forecast for 2013 in its quarterly Statement on Monetary Policy released on Friday. The RBA said that the Australian GDP growth is now expected to be a little below trend over 2013, at round 2.5 percent, before picking up a little in 2014. "The outlook for the Australian economy is slightly weaker than it appeared at the time of the November Statement," the RBA said in the statement. "These forecasts have been revised down since the November Statement, largely reflecting the slightly weaker outlook for mining and non-mining investment." The RBA mentions several reasons for lowering the outlook for the Australian economy, including the expectation that the mining investment boom will peak in 2013, the effect of the persistently high level of the Australian dollar and little sign of a near-term pick-up in non-mining investment. The central bank expects inflation to remain in its target range of two to three percent in 2013. "Over the next few quarters, the pace of underlying inflation is expected to remain at an annual rate of around 2.5 percent and continue to be consistent with the inflation target for the rest of the forecast period," the RBA said.