Record low interest rates will remain in place for years, Reserve Bank governor Philip Lowe has warned while raising fears the coronavirus pandemic will cast an enduring shadow over the Australian economy.
The government has taken official gross debt to a record $680.4 billion as it deals with a collapse in tax revenue and extra spending to help support the economy.Dr Lowe said deflationary pressures, increased savings and large shortfalls in potential economic activity all meant interest rates would stay low for an extended period of time."I think it's likely we're going to see interest rates at their current level for years," he said.
But governments could not rely on borrowing beyond the pandemic to get their economies growing, urging reform in areas including tax, infrastructure, human capital, industrial relations, regulation and research and development.
swrighteconomy if cash doesn't earn a good dividend at the bank, then there is no money to spend. No stimulus to the economy. Less tax revenue and less gov. spending on services.
swrighteconomy then our economy would be in prolonged stagnation like the lost decades in Japan 20 years of recession
swrighteconomy Careful - US property and Sharemarkets sky rocketed. We are now in danger of repeating Japan's lost decade.
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