The historically low rate of interest is supporting growth in the economy by lowering the cost of borrowing for businesses and households. The low exchange rate over the last few years has smoothened the way for shifting resources to the service sector, and the moderate growth in the wage rate has facilitated the strong growth in the rate of employment. Thus, the rate of unemployment is expected to fall to 5.5 percent by 2017.The household consumption is forecasted to grow at a steady rate, supported by a falling savings rate of households, growth in employment rate and lower prices of petrol. The persisting incertitude about the impact of prices of oil on investment and consumption poses a danger to not only Australian economy, but to the global economic outlook during the period of forecast. The prospect for investments continues to be constructive with a line of effort yet to be taken into execution. In addition to keep the rate of inflation in control in many advanced economies, it is expected to achieve the same through a moderate growth in the wage rate.
The competition in the retails sector and lower prices of petrol is also expected to weigh on rate of inflation. The export of non-rural commodity in Australia is projected to growth by 7 percent in 2016-17. This is further expected to increase to 7.5 percent in 2017-18 owing to the ramp up in the production of LNG and iron ore (Statement on Monetary Policy, 2016). Over the preceding years, the low rate of exchange and increasing demand from Asian countries has supported growth in exports of services in the country, such as education and tourism (Driving innovation, fairness and Excellence in Australian Education, 2016). Currently, Australia is considered to be a net importer of petroleum products and oil. The households and business enterprises in Australia are benefitted from low price of fuel. However, a fall in the price of oil would impact the export prices of LNG as they are associated to price of oil through a future contract.