The Reserve Bank has cut its growth and inflation forecasts for the upcoming financial year due to weaker global conditions, along with forecasts for restrictions in wages growth.
The RBA said in its quarterly statement on monetary policy that underlying inflation is expected to be about 2% for the year to the end of June, down 0.25 percentage points than forecast a quarter ago.
It also expects gross domestic product for the year to June to be just 2.75%, down from 3.5%.
In the financial year to June 2013, the economy is expected to grow at a rate between 2.5% and 3.5%, compared to the previous prediction of 3-4%.
“Some components of the economy exceeded expectations while others underperformed over the past year, but overall, economic growth was weaker than expected,” it said in the statement.
The RBA said a weaker employment market will keep wages growth under control.
Growth in online sales eased up in March, according to the latest NAB online sales index, with sales up by 19% year on year.
For the 12 months ending in March, total online spending was around $11 billion, equivalent to 5.1% of traditional bricks and mortar spending, the survey found, with the index itself rising to 182 points from 153 points in March 2011.
In dollar terms, online spending grew by about 19% year on year, down from the 39% level in March 2011, although it remains on trend with the last six months.
NAB said it noted an “interesting spike” at the sub-sector level, particularly in electronics sales.
“This was likely related to the growth of tablet sales, with March coinciding with the release of various new products, including Apple’s new iPad.”
Consolidated Media Holdings has said it is not looking to sell its 25% stake in Foxtel.
The company confirmed in a statement it had only been in preliminary discussions with a possible proposal.
“No control proposal or other form of offer has been made to CMH and CMH can give no assurance that a control proposal will be made,” it said in a statement.
“CMH is not considering a sale of its Foxtel interest.”
The company, controlled by James Packer, was previously rumoured to have been considering a sale.
Speculation had grown that News Corporation was considering buying the stake, adding to its 25% ownership.
Westpac reported a first-half cash profit of $3.195 billion yesterday, up 1% from a year earlier, and slightly more than the $3.12 billion profit expected by analysts.
The result, which puts the bank on track for a bumper $6 billion-plus full year profit, was driven by a rebound in treasury and markets income, and tighter cost control.
The bank will make an announcement on interest rates today.
The Australian sharemarket has opened lower this morning following a weak night on Wall Street where poor services industry data caused the market to fall.
The benchmark S&P/ASX200 index was down 22 points or 0.5% to 4406.2 at 12.00 AEST, while the Australian dollar also fell to just $US1.02c.
In the United States, the Dow Jones Industrial Average fell 62 points or 0.5% to 13,206.6.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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