ric battellino : an update on the economy and financial developments address by mr ric battellino, deputy governor of the reserve bank of australia, to the urban development institute of australia, national congress 2009, brisbane, 31 march 2009. * * * introduction the past six months have certainly proved that we live in a globalised world. last september, the us investment bank, lehman brothers, collapsed and several other major us financial institutions came under immense stress. these events transformed what was a difficult but manageable situation in global markets into a full - blown financial crisis. the consequences for the global economy have been severe. up until these events, most forecasters had been predicting that the major economies would have a relatively mild slowdown in 2009, and that asia would be largely unaffected. those predictions have since been replaced by forecasts of a major global downturn, with all significant countries affected. australia entered this difficult period in much better shape than many other countries. disciplined monetary and fiscal policies in earlier years, sound regulation and a prudent approach to lending by our banks meant that the country was largely free of major problems. it is not surprising therefore that, so far, we have weathered this global downturn better than most. we have had more scope than others to move policies in the expansionary direction and our banks, being largely free of problem assets, are in a position to keep supplying credit to the economy. having said that, no amount of good economic management can totally shield us from what is happening in the global economy. in my talk today i would like to review how the global economy is evolving ; update you on how we are seeing the domestic economy ; and say a few words about household sector finances and the housing market. the global economy we all know by now that the global economy is going through a recession. in itself, this is not unusual ; the world economy has tended to experience a downturn every 7 - 10 years. the current global downturn is, however, more severe than we have experienced for a long time. this is because in some important countries a banking sector crisis has been overlaid on the regular economic cycle. this has added to the severity of the downturn because : • it has undermined the confidence of the community ; and • it has led to a sharp slowdown in the availability of credit. this cycle is also highly synchronised, with every significant country in the world affected. household and business confidence collapsed simultaneously in every country late

philip lowe : opening statement to the house of representatives standing committee on economics opening statement by mr philip lowe, governor of the reserve bank of australia, to the house of representatives standing committee on economics, online, 14 august 2020. * * * much has changed in the world since we last met in february. we have experienced a global pandemic, the biggest peacetime contraction in the australian economy in nearly a hundred years and extraordinary monetary and fiscal policy measures. this all means that many of the challenges we face today were hardly imaginable just six months ago. economic forecasting is very difficult at a time like this, but the rba released its regular economic update last friday in the statement on monetary policy. i will begin by highlighting some of the main points from this update and then turn to the policy response. we do not yet have the gdp data for the june quarter, but it will show the biggest economic contraction in many decades, likely to be around 7 per cent. if there is any good news to be found here, it is that this decline is not as large as initially feared. similarly, while the labour market outcomes have been poor, they have not been as bad as expected. hours worked were initially expected to fall by a staggering 20 per cent over the first half of this year. the actual fall has been around half of this, largely due to australia ’ s initial success in containing the virus and the earlierthan - expected easing of some restrictions. looking forward, there is a high degree of uncertainty about the outlook and our economic recovery depends upon how successful we are in containing the virus. in our baseline scenario, we are expecting the australian economy to contract by around 6 per cent this year, and then grow by 5 per cent next year and 4 per cent in 2022. it is possible that we will do better than this if there is near - term success in containing the virus or there are medical breakthroughs. on the other hand, if we were to see further setbacks in containing the virus, the recovery would be delayed even further. given this uncertain outlook, we should be prepared for a recovery that is uneven and bumpy. the recovery is also likely to be more drawn out than was initially expected despite the downturn being less severe than expected. there are a few factors at work here. the most obvious is the outbreak in victoria. at a personal level this is very distressing, and on behalf of the staff of the rba i extend best wishes