RBA Rate Cut Expected Tomorrow as Deloitte Expert Calls for 25 Basis Point Drop to Boost Business Investment

Leading economist argues productivity crisis demands immediate action amid global economic storm clouds

Credir : Pradeep Phillip

Australia's economic future hangs in the balance as the Reserve Bank of Australia (RBA) deliberates on interest rates ahead of tomorrow's crucial announcement. The RBA recently cut rates from 4.35% to 4.10%, but economists are calling for further easing to address Australia's deepest structural challenges.

Deloitte Access Economics lead partner Pradeep Phillip advocates for a 25 basis point interest rate cut to stimulate business investment and boost productivity, arguing that declining inflation and global economic uncertainties create the perfect conditions for monetary easing.

Key Takeaways

• Business investment is critical: The number one economic priority is increasing business investment to lift Australia's stagnant productivity growth

• Global risks justify action: Trade tensions and geopolitical uncertainties provide additional rationale for rate cuts as economic insurance

• Productivity crisis deepening: Australia's economic output per hour worked has barely shifted over the past decade and has declined since 2020

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