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Covid-19 Outbreak In Victoria To Cut Australia's Growth In Q3, RBA Chief Says

The outbreak of the coronavirus in Victoria is set to offset the recovery taking place in most other parts of Australia, Reserve Bank of Australia Governor Philip Lowe said Friday.

On the economic front, the virus outbreak is set to reduce Australia's economic growth in the September quarter by at least 2 percentage points, Lowe told a standing committee on economics.

"As a result, we are now not expecting a lift in economic growth until the December quarter," he said.

He observed that another major issue is the growing impact of an extended period of weak aggregate demand. Also, people's attitudes to spending are changing because of the pandemic.

The jobless rate is expected to hit around 10 percent later this year. High unemployment is likely remain for some time, Lowe said.

Further, the governor said "We have not ruled out a separate bond buying program, or other adjustments to the mid-March package." But for the time being, the Board's view is that the best course of action is to continue with the current package.

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