Staff of Reuters Read for 2 minutes (Reuters) – SYDNEY, July 8 (Reuters) – To raise inflation, Australia’s unemployment rate would have to fall further and remain in the low 4% range, which isn’t predicted until 2024, according to the country’s senior central banker. Since last year, the Reserve Bank of Australia (RBA) has pledged considerable monetary stimulus to help stimulate employment and economic development. “Determining when the labor market’s spare capacity will be absorbed and, thus, when we can expect a sustained boost in wages growth is tough,” RBA Governor Philip Lowe said in a speech in Sydney. “While it’s difficult to say for sure, it’s probable that the unemployment rate will have to stay in the low fours for the Australian economy to be regarded fully employed,” Lowe said. The current unemployment rate is 5.1 percent. At its monthly policy meeting on Tuesday, the RBA kept the cash rate at a historic low of 0.1 percent to help support the economy, reiterating that it will not raise rates until it meets its employment and inflation targets. According to the RBA’s projections, Australia’s economy would continue to struggle with surplus labor market capacity and low inflation until 2024. “We continue to foresee a steady increase in aggregate wage growth. We also believe it will take until 2024 for inflation to return to its goal range of 2 to 3% “”It’s in the range,” Lowe added. (Swati Pandey contributed reporting, and Shri Navaratnam edited the piece.)/n
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