The mining boom benefits the entire Australian economy, despite structural changes to some industries that may occur due to a strong dollar, according to a statement by the Reserve Bank of Australia (RBA).
The Sydney Morning Herald reported that RBA deputy governor Philip Lowe noted that the mining investment boom combined with the high prices for commodities extracted from the country have helped bolster the value of the Australian dollar. This, he noted, is expected to continue aiding the economy in the coming year.
“In effect, there is a chain that links the investment boom in the Pilbara and in Queensland to the increase in spending at cafés and restaurants in Melbourne and Sydney,” Lowe said in a speech on February 15.
The Herald reported that analysts in the sector have focused on the impact of mining companies on the whole economy, as there are significant ties between manufacturing and the mining services sector.
“This chain can be hard to see, ” Lowe said in the speech. “But it is real, and it is one of the factors that have had a material effect on the Australian economy over recent years.”
Investment in the sector is expected to continue if China’s economy avoids a “hard landing,” according to Dow Jones Newswires.
“The growth outlook in Australia is not only firm, it is strong,” Anoop Singh, director of the IMF’s Asia and Pacific department, told the news source. “If, as we believe there will be, a soft landing in China, it’s possible that investment in resources could be even larger than expected.”
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