The Reserve Bank is almost certain to leave the cash rate at a record low when its board meets this week in the face of a deteriorating situation in Victoria.
Economists expect the central bank will keep the cash rate at 0.25 per cent on Tuesday, and where it has stood since March while maintaining its bond-buying program to pump liquidity into the Australian financial system.
The Reserve Bank will also release its quarterly statement on monetary policy on Friday and all eyes will be on its latest economic forecasts.
“Since the bank’s last forecast update in May, data have shown the direct hit to the economy from the first wave of the pandemic was not as bad as initially feared,” National Australia Bank economist Kaixin Owyong says.
“In our view, risks to the recovery remain tilted to the downside, particularly as the second wave continues to unfold.”
In May, the RBA forecast annual economic growth to slump eight per cent in the year to June as the nation suffers its first recession in nearly 30 years.
The June quarter national accounts will be released on September 2.
Tuesday will also see the release of the weekly consumer confidence survey from the ANZ and Roy Morgan, which has fallen for five straight weeks, in the wake of a rise in COVID-19 deaths in Victoria and NSW.
Still, retail spending has been surprisingly upbeat since an initial slump when the pandemic first hit.
Retail spending data for June on Tuesday is expected to confirm the recently released preliminary figures from the Australian Bureau of Statistics with a 2.4 per cent rise in the month.
This builds on the 16.9 per cent rebound in May after the hefty 17.7 per cent plunge in April.
However, economists expect quarterly retail trade figures also