Rate decision is a balancing act: Swan

SYDNEY (AAP) - Sept. 6 -Treasurer Wayne Swan says the Reserve Bank's decision to leave its key rate unchanged for another month reflects a balance between uncertainty in the global economy and the Australia's strong fundamentals.
The central bank left its cash rate at 4.75 per cent following Tuesday's monthly board meeting as widely expected by economists, and where it has remained since November last year.
The decision came as the run of data this week showed that while Wednesday's national accounts will show the economy avoided a recession in the first half of the year in wake last summer's natural disasters, it has yet get back to full steam.
Announcing the decision to leave rates on hold, Reserve Bank governor Glenn Stevens said the board judged that it was "prudent" to maintain the current stance of monetary policy.
He said the outlook for the global economy is "less clear" than it was earlier in the year with financial markets very unsettled over recent weeks, confronted by uncertainty about both sovereign debt problems and the prospects for economic growth in Europe and the United States.
At the same time, Australia's near-term growth outlook continues to look somewhat weaker than was expected a few months ago.
"Beyond the near term, growth is still likely to be at trend or higher, unless the world economic outlook continues to deteriorate," Mr Stevens said in a statement.
"In future meetings, the board will continue to assess carefully the evolving outlook for growth and inflation."
Mr Swan agreed with the governor's assessment that some sectors of our economy are coming under pressure from the high dollar, cautious consumer and volatility in the global economy.
"Despite the patchwork pressures, we shouldn't lose sight of the fact our economic fundamentals are strong," he said in a brief statement.
"We're not immune from global developments, but we should also take comfort in the fact that our situation is in stark contrast to many advanced economies."
Still, new Australian Bureau of Statistics data on Tuesday suggests economic growth during the June quarter may not be a sprightly as first thought as exports failed to live-up to expectations.
The June-quarter balance of payments showed exports will likely detract 0.5 percentage points from gross domestic product (GDP) when economists had forecast a modest contribution.
The current account deficit was slightly larger that predicted at a seasonally adjusted $7.4 billion in the June quarter, albeit smaller than the upwardly revised $11.1 billion deficit recorded in the March quarter.
"While it is good news that exports in some parts of the mining sector have recovered, the damage inflicted on coal exporters from the floods will continue to be felt for some time yet," Mr Swan said.
Mr Stevens told federal politicians in August that the process of dewatering coal pits is taking longer than initially expected.
"The recovery of coal production in Queensland is probably about two-thirds complete at the present time. It may be early next year beforeproduction has fully recovered," he said.
Economists now expect Wednesday's national accounts may show the economy grew by less than the 1.1 per cent predicted earlier in the week for the three months to end-June.
This would be only a partial recovery of the steep 1.2 per cent decline in GDP in the March quarter that bore the brunt of the summer's disasters.
But the economy will have avoided a technical recession that is defined as two consecutive quarters of economic contraction.