Australia's resource exports are expected to make a significant contribution to output growth, offsetting the drag on growth from the falling mining investment, policymakers of the Reserve Bank of Australia said at the board meeting held on February 7.
Higher terms of trade represented a boost to national income, which provided some upside risks to the domestic forecasts, the minutes showed Tuesday.
The economy shrank in the third quarter reflecting some temporary factors. Members noted that the weakness caused by consumption was not expected to have continued into the December quarter.
The bank forecast growth to pick up to around 3 percent in the year-ended terms later in 2017, and to remain above estimates of potential growth over the rest of the forecast period.
Policymakers expect the underlying inflation to pick up gradually, largely reflecting the rising unit labor costs and the diminishing spare capacity.
Members also noted that the recent pick-up in the global inflationary pressures could have a more-than-expected flow through to domestic inflation.
At the meeting, policymakers voted to leave the cash rate unchanged at 1.50 percent as they judged that holding the stance of policy unchanged would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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