So it is likely that the amount of investment in the resources sector, as a share of GDP, will be higher than it was before the mining investment boom. We are already seeing some evidence of this, with increased spending on ‘sustaining’ the capital stock being one of the factors behind the recent improvement in the Western Australian economy.
Our recent decision to provide forward guidance regarding our main policy rate was also successful in stabilizing financial markets unduly affected be spillovers from the recent FED announcement of future tapering of Quantitative Easing (QE). Europe is behind the US in economic recovery and inflation risks which implies that monetary policy has to stay accommodative for a longer period of time.