The Reserve Bank of Australia is getting close to lifting its 1.5% cash rate, the OECD believes. In a commentary accompanying its global economic outlook released in Paris Tuesday night the organization says stronger terms of trade and continued growth in resource exports are boosting Australian incomes and tax revenues, Bloomberg reported .Mining investment looks to have bottomed out, while rising capacity utilization and high business confidence point to “a renewed cycle in business investment outside the resource sector”. The recovery in employment growth and a rising number of vacancies indicate a strengthening of the labor market. However, underemployment has edged higher and wage growth and inflation remain steady. Rising household indebtedness and signs of a cooling housing market are keeping consumer sentiment “relatively soft”. Household spending remains subdued. The OECD expects the Reserve Bank to push up its cash rate in the second half of 2018, “when the pickup in wages and prices becomes more entrenched”.
