Speech Summary Australia and Canada – Shared Experiences

The speech begins by acknowledging the close relationship that exists between the central banks of Australia and Canada and the many shared values and experiences of both nations. The importance of resource exports to both economies is noted, as well as the strength and resilience of their banking systems. The speech emphasises the benefits derived by Australia and Canada from a common commitment to open trade and financial markets and the commitment of the two countries to address the uneven distribution of those benefits.

The speech turns to the Bank's latest economic forecasts and discusses the outlook for growth, employment, inflation and wage growth. Conditions in the two nations' resources sectors are compared. The speech then focuses on the success of both countries in successfully accommodating increased mining investment and the complications of rebalancing the respective economies from mining to non-mining-led investment.

House prices and borrowing are addressed as topics that resonate with both nations. The speech contends that there are some signs in Australia that high levels of household debt are curbing household spending. It subsequently observes that, while Australian households are coping reasonably well with debt, the interaction between consumption, saving and borrowing for housing is a significant issue which should be closely monitored.

The speech covers a number of factors that have contributed to recent low inflation in both countries before examining the outlook for inflation in Australia. On the labour market, recent trends are said to be heading in the right direction despite some regional variability. The speech concludes by impressing that both Australia's and Canada's monetary policy frameworks have played important roles in each nation’s economic stability of recent times.

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