Chief Economist Shane Oliver at wealth manager AMP (ASX: AMP) has joined the chorus calling for the Reserve Bank of Australia (RBA) to cut rates in the face of increasing evidence that Australia's economy is worsening.
Oliver singles out a slowing China as the major problem for Australia's economy, with our heavy reliance on Chinese demand for our resources the primary issue.
While further cuts to interest rates will hurt savers, Oliver makes the point that on balance more Australians are borrowers than depositors and therefore lower interest rates should help more Australia's than they should hurt. Coupled with his view that the Australian dollar is headed towards 80 cents, he sees lower rates and the lower dollar as impetus to support the economy.
Oliver's call comes as National Australia Bank's (ASX: NAB) Group Chief Economist Alan Oster and his team revise their expectations that the RBA will be forced to more drastically cut rates in the face of a worsening domestic economic outlook.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
