Australia's central bank chief optimistic, but not too precise, on economy
Reserve Bank of Australia governor Glenn Stevens says fundamentals in place for a pick up in economic growth
Australia's top central banker on Tuesday laid out a generally upbeat outlook for the economy over the next couple of years, but at the same time castigated markets for overreacting to minute changes in forecasts which were by their very nature imprecise.
Rather, Reserve Bank of Australia (RBA) governor Glenn Stevens urged a greater focus on larger global forces including demographics and technological change.
“One can't help but observe that, in common discussion about the economic outlook, we too often ignore the influence of demography,” Stevens told a dinner of business economists.
Instead, there was far too much focus on every change in the RBA's economic forecasts no matter how small.
“This fervent desire for precision is not supported by any demonstrated accuracy of economic forecasts,” said Stevens.
“Its cousin, a hankering for policy fine-tuning, is barely, if at all, better supported by the historical outcomes of economic policymaking,” he added.
The central bank has recently resisted pressure to cut interest rates again from already record lows of 2 percent and expressed doubt that easier policy would do much good.