Australia should continue to grow at a moderate pace as a fall in mining investment is offset by growth elsewhere, and whether the current turmoil in global markets will scuttle this view remains to be seen, the country's top central banker said on Friday.
In opening remarks to the House of Representatives Standing Committee on Economics, Reserve Bank of Australia (RBA) Governor Glenn Stevens also reiterated there was scope to cut interest rates further if necessary.
"The fall in mining investment spending will continue for at least one more year, though it is probably having its most significant effect on the rate of growth now. Other areas of demand are expected to add to growth. The net effect of all this is likely to be continuing expansion at a moderate pace," Stevens told legislators in his twice-yearly testimony.
"One key question will be whether the recent financial turbulence itself will have a material negative effect on aggregate demand - in Australia or abroad. I don't expect that we will be able to answer that question for a little while yet."