Surging Debt Has Weakened Australia's Resilience, RBA's Lowe Says
- Manageable downturn could turn into ‘something more serious’
- Central bank chief addresses economists in Brisbane speech
Philip Lowe.
Photographer: Brendon Thorne/BloombergThis article is for subscribers only.
Australia’s central bank chief had a reminder Thursday for borrowers that have helped send household debt to record levels: interest rates will one day rise.
Reserve Bank of Australia Governor Philip Lowe used a speech in Brisbane to reiterate his concerns about growth in private debt outpacing incomes. The risk is that heavily indebted households could slash their spending in response to any shock, meaning “an otherwise manageable downturn could be turned into something more serious,” Lowe said.