Guy Debelle: Risks to the outlook

Keynote address by Mr Guy Debelle, Deputy Governor of the Reserve Bank of Australia, at the 14th Annual Risk Australia Conference, Sydney, 15 August 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Today I am going to talk about some of the key risks around the outlook for the Australian economy. I will draw on the material published last week in the August Statement on Monetary Policy. On the global side, I will discuss some of the implications of the trade and technology disputes between the US and China. On the domestic side, the key risk for some time has been the outlook for consumption. I will highlight some of the main uncertainties that are likely to affect that outlook. Beyond the near-term risks for the economy, climate poses a material risk for the economy and financial markets over a longer horizon. Finally, given the audience, I will remind you of an actuality, not a risk, that you need to be prepared for; namely the cessation of LIBOR, the key interest rate benchmark in financial markets.

Trade and Technology Dispute

The trade dispute between the US and China has been with us in its current form for almost two years now. The direct effect of the tariffs that have been imposed to date on global growth has not been all that large, though the impact on particular businesses has been significant.