Bassanese in the AFR today (he could add Koukie to the list of guys who think the economy is growing "below trend"):
While the RBA acknowledges these divergences, it has contended that they are largely cancelling each other out, such that overall the economy is growing at a “trend” pace. On that view, interest rates at around neutral seem appropriate. And there remains support for this view given that overall measures of business and consumer confidence firmed a bit further last month and are close to long-run average levels.
But others beg to differ. Westpac and AMP chief economists Bill Evans and Shane Oliver, for example, argue that the overall economy is sufficiently weak to justify lower rates. Some support for this view could come on Wednesday if the December quarter national accounts reveal the economy grew by considerably less than the 1 per cent implied forecast by the RBA in its February Statement on Monetary Policy.
