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Australia's Spending Bonanza Gives Central Bank Breathing Room on Rates

  • Government trailing badly in polls is likely to open checkbook
  • Fiscal boost may obviate mounting calls for monetary stimulus
Bloomberg business news
Australia's Spending Bonanza Gives Central Bank Breathing Room on Rates
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Australia’s economy is set for a fiscal injection as a government trailing in opinion polls ahead of a May election tries to buy its way back into contention and the opposition seeks to hang onto its lead.

The expected spending bonanza in the April 2 budget will be well received by the nation’s heavily indebted households. It may also win favor in a more unlikely quarter: the traditionally buttoned-down, inflation-fighting Reserve Bank of Australia, which is keen to avoid resuming interest-rate cuts.