Australia’s economy expanded slower than economists forecast last quarter after households boosted savings, suggesting the central bank may need to do more to spur spending as a mining investment boom wanes. The Aussie fell.
The Australian government’s decision to block Archer-Daniels-Midland Co.’s takeover of GrainCorp Ltd. comes 12 weeks after Prime Minister Tony Abbott’s election-night vow that Australia is open for business.
Rio Tinto Group, the world’s second- biggest mining company, plans to suspend alumina production at its loss-making Gove refinery and focus on bauxite output due to low prices and an elevated exchange rate.
Australian businesses need to boost efficiency to maintain growth in living standards and could use engineers freed up from mining construction to build more infrastructure, central bank Deputy Governor Philip Lowe said.
Reserve Bank of Australia Governor Glenn Stevens said that while the central bank has been unconvinced about the effectiveness of trying to drive down the Aussie, he remains “open-minded” on currency intervention.
Australia’s central bank said there was “mounting evidence” interest-rate cuts were working, even as it retained the option of loosening policy to support growth in an economy battling an “uncomfortably high” currency.