Australian economy successfully rebalancing after mining boom: central bank

People walking past the Reserve Bank of Australia in Sydney, Australia, on March 1, 2016.
People walking past the Reserve Bank of Australia in Sydney, Australia, on March 1, 2016.PHOTO: EPA

ADELAIDE (Reuters) - The Australian economy is successfully rebalancing after a decade-long boom in mining investment and low inflation means there is still scope for further rate cuts if needed, a top central bank official said on Tuesday.

In an upbeat speech on the economic outlook, Reserve Bank of Australia (RBA) deputy governor Philip Lowe linked the prospects for an easing to the labour market, implying a move might not be needed should the unemployment rate remain steady.

Mr Lowe pointed to a range of promising indicators including business surveys and last week's gross domestic product figures showing the economy grew a surprisingly brisk 3 per cent over 2015.

"While none of these indicators suggests that we are on the cusp of a return to the type of growth rates we saw before 2008, they do suggest that the economy is successfully rebalancing following the mining investment boom," said Mr Lowe.

He reiterated the RBA's standard line that low inflation provided scope for a cut in the 2 per cent cash rate "should that be appropriate in supporting demand."

"An important factor here will be whether the growth in aggregate demand continues to be sufficient to accommodate the growth in our labour force," said Mr Lowe.

Mr Lowe noted the past fall in the local dollar was helping a range of industries from tourism to education.

Policy easing by foreign central banks, from Europe to Japan, was a "complication" as it tended to put upward pressure on the Australian dollar, he added.