Australia central bank says Delta outbreak interrupts economic recovery

SYDNEY, (Reuters) – Australia’s central bank said the outbreak of the Delta variant of COVID-19 had interrupted the recovery of the national economy but expects the setback to be temporary, with the economy to bounce back as vaccination rates continue to rise.

Australia’s economy would return to growth in the December quarter but the recovery was likely to be slower than seen in late 2020 and early 2021, the minutes of the Reserve Bank of Australia’s October policy meeting showed on Tuesday.

Members noted that less accommodative monetary policy would see lower housing prices and credit growth, but it would result in fewer jobs and lower wage growth.

The Board reiterated its view of no hike in the 0.1% cash rate until 2024 given sluggishness in wages and inflation.