2017.09.2001:54:00UTC+00RBA's Ellis Says Global Economy In Better Shape

The global economy is looking better than it did a year ago and this is positive news for the Australian economy too, Reserve Bank of Australia's Assistant Governor Luci Ellis said Wednesday.

The turning point was around the end of last year, she said at the event organized by the Australian Business Economists.

"While it doesn't seem to have picked up further recently, neither is this expansion a flash in the pan," the banker said.

On the domestic front, Ellis said household debt is a potential exacerbating factor.

If some other shock should come along, debt would make it worse. Of itself, the level of indebtedness is unlikely to be a triggering factor that sparks a negative outcome, Ellis noted.

Further, she said if inflation stays low despite reasonable growth in a range of economies, policymakers will face a challenge.

In that scenario, policy still needs to remain appropriately expansionary while avoiding further build-up of leverage and financial risk.

Calibrating the pace of withdrawal of stimulus will be no easy task, Ellis noted. Policy will therefore need to adapt to the evolving momentum in national and global economies.