Growth in the Australian economy is likely to remain steady in the near future, according to the University of Melbourne's Associate Professor Mark Crosby, who spoke last month at the Melbourne Institute Economics Forum.
In discussing the latest issue of the Mercer-Melbourne Institute Quarterly Bulletin of Economic Trends (QBET), Dr. Crosby said that key economic indicators released in recent months continue to show solid growth, despite some signs of weakening economic activity and emerging inflationary pressures.
Dr. Crosby said that over the previous two months oil prices had fallen and the forecast was for inflation to remain comfortably within the RBA's target range over the next twelve months.
"With inflation rising recently to three per cent, and with strong growth in oil prices over the past few years, many pundits have been predicting the return of inflation to problematic levels", said Dr. Crosby.
"However, I would argue that the risks of inflation rising are quite low.
"Strong competition in product and labour markets, as well as inflation targeting central banks, are all helping to keep inflation at sustainable low levels. In the economy of the twenty-first century rising oil prices are likely to lead to changes in relative prices rather than to increase in inflation more generally", he said.
The Melbourne Institute Economics Forum was held in December 2005, with the main topic of discussion being Poverty and Opportunity.
