RBA hikes could be on the way

Adam Smith 29 November 2016

coins percent upAn international economic group has warned Australians to brace themselves for a rate hike.

The Organisation for Economic Co-operation and Development (OECD) has predicted that the Reserve Bank of Australia (RBA) is likely to begin raising the official cash rate before the end of 2017, the Sydney Morning Herald has reported.

In its Global Economic Outlook, the OECD said rate hikes in 2017 will be timely, "given likely monetary-policy developments elsewhere, the cyclical development of the domestic economy and the need to unwind tensions from the low-interest environment, notably in the housing market", the SMH reported.

The OECD also urged the government to take its focus off of bringing the budget back into surplus, and instead provide economic stimulus.

"Returns would be high for accelerated infrastructure development and investing in skills, an area where Australia falls short of top-performing countries. Active measures to increase transfers to households could help address inequality, thereby making the recovery more inclusive," the report said.

The OECD argued that Australia’s government debt was still low, and that the current debt-to-GDP ratio of 45% was projected to fall, the SMH said.

Latest home loans headlines

Image: Shutterstock

More help from finder.com.au

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question