Australia is likely to see a rise in the jobless rate as economic growth is not keeping pace with the rapidly expanding workforce, according to John Edwards, a member of the Reserve Bank of Australia’s interest-rate setting board.
“We’ve still got a rapid rate of growth of the workforce and GDP growth is just not quick enough to keep up with it. There is no doubt at this rate of 2.5 percent, it is below the rate that is necessary to prevent a rise in unemployment,” Edwards told the Wall Street Journal.
“We’ve got to get to 3 percent (GDP growth) at least,” Edwards was quoted as saying in an interview Wednesday.
Australia saw its unemployment rate jump to 6.4 percent in January, the highest level in nearly 13 years.
The central bank surprised financial markets Tuesday by keeping its cash rate steady at a record low of 2.25 percent, citing worries about the pace of house price growth. Most economists expected a cut.
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