The property market is still in free fall after the Reserve Bank of Australia cut its forecast for the Australian economy.
The latest economic figures show that while the Australian dollar is recovering faster than other currencies, the dollar-to-dollar trade deficit has continued to grow.
The economy has contracted by 0.4 per cent in real terms in 2016, compared to 0.5 per cent growth in the year before, and by 1.2 per cent last year.
The Federal Government’s economic forecast for 2017 is now down to 0,819,000 jobs, according to the Australian Bureau of Statistics.
In a sign of the weakness in the Australian housing market, the number of new listings in the housing market has dropped by over 20 per cent since April, according the Reserve.
“We now know that the underlying structural issues that have led to the recent economic downturn are more widespread and longer-lasting than previously thought,” the Reserve said in a statement on Monday.
The Reserve is warning that the economic and fiscal impacts of the downturn could be far-reaching.
It has warned of “significant structural and external shocks” that could affect the economy for decades.
The central bank said it is “committed to supporting the Reserve’s monetary policy and other policy tools in order to manage the potential long-term impact of the recent recession”.
It added that it is prepared to provide more monetary support to businesses, including a temporary reduction in interest rates to a “healthy level”.
The Reserve has warned that a slowdown in the economy is likely to lead to a fall in economic growth in Australia over the next two years.
The economy grew by 0,737,000 in the first quarter of this year.
According to the latest ABS figures, the unemployment rate is at 6.4.
More to come.