Australian Economic Update

The Reserve Bank of Australia held interestrates steady at 1.

5% in early November.

The RBA indicated that after cutting interestrates in both May and August this year that a steady monetary policy stance was the bestcourse of action to help sustain Australian economic growth, but balance the risks betweenthe housing market and low inflation.

Recent data on the Australian economy showsan ongoing good performance for the net export sector, with higher prices for iron ore andcoal likely to be very supportive for the final months of 2016.

The economy is alsobeing supported by ongoing strength in the services sector, especially education andtourism and in the housing market.

This is being offset, to some extent, by ongoingsoftness in business capital investment and a cautious consumer.

In addition, there are some signs that the pace of employment growth is beginning toslow.

Taking all these factors together, the annualpace of economic growth in Australia could slow a little to around 2.

75 to 3 percent,from the current rate of 3.

3 percent.

But at this rate, Australia will remain oneof the fastest growing of the major economies and continue our 25 years of uninterruptedeconomic growth.

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