Australian Floods May Slow Economy, Extend Rate Pause

Northeastern Australia’s worst floods in half a century are likely to slow the nation’s economy and prompt the central bank to refrain from raising interest rates as inundated coal mines reduce export income.

Disruption to mining and damage to crops in Queensland will damp national growth by 0.2 percentage point this quarter, according to the median of eight estimates in a Bloomberg survey. The Reserve Bank of Australia, which meets Feb. 1, may discuss what could prove to be a “significant impact” on the economy, board member Donald McGauchie said this week.