Chance of rate cut narrows
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The central bank has little need to cut the cash rate in coming months because of its confidence about economic growth in the short and medium term, economists say.
In its Statement of Monetary Policy released on Friday, the Reserve Bank of Australia (RBA) said economic growth in 2012 would be higher than previously expected.
It now expects gross domestic product (GDP) to grow by 3.5 per cent in 2012, up from its 3.0 per cent forecast in May.
"The economy is then expected to grow at around three per cent over 2013 and 2014, little changed from the May statement," the RBA said.
HSBC chief economist Paul Bloxham said the RBA seemed content with how the Australian economy was travelling, despite an acknowledgement of possible risks from the euro zone.
"Europe does present the biggest downside risk, and it's clear that's where they think the biggest risk lies," he said.
"But in general it's a fairly upbeat statement - their medium term growth forecasts are pretty much what they were in May, and in the short term, growth is stronger and inflation is lower."
The possibility of another cash rate cut in 2012 was becoming a closer call, Mr Bloxham said.