Australian employers added workers for a second month in October and the unemployment rate fell as energy companies ramped up hiring, helping the economy weather global market turmoil from Europe’s fiscal crisis.
The Reserve Bank of Australia kept the benchmark interest rate unchanged, saying that while its board considered boosting borrowing costs, it was prudent to hold off because of a clouded global economic outlook.
Australian government plans to reduce corporate taxes and overhaul resource-industry duties may have less of an impact on economic growth than the 0.7 percent gain claimed by Treasurer Wayne Swan, according to analysts.
Australia’s central bank saw scope to reduce the nation’s benchmark interest rate from a developed- world high if needed as a slower domestic economy eased inflation concern, minutes of its Oct. 4 meeting showed.
The Reserve Bank of Australia cut its forecasts for economic growth and inflation for the next two years as financial turmoil abroad makes businesses more reluctant to hire and consumers wary about spending.
Australia’s government will cut A$6.8 billion ($6.7 billion) in spending to meet Prime Minister Julia Gillard’s pledge to deliver a budget surplus as Europe’s debt crisis crimps revenue by slowing global growth.
Julia Gillard held on to power as Australia’s first female prime minister after two independent lawmakers agreed to prop up a minority Labor Party government to resolve the country’s closest election in 70 years.