Latest forecasts from Reserve Bank of Aust

KEY POINTS FROM RBA GOVERNOR'S STATEMENT TO ECONOMICS COMMITTEE:

* Australian economy to expand by 2.5 per cent this year and 2.75 per cent over 2020.

* Downward revision this year mainly reflects weak consumption growth.

* Extended period of unusually slow growth in household incomes has been weighing on household spending, as has the adjustment in the housing market.

* There are signs the economy may have reached a "gentle turning point".

* Expecting the quarterly GDP growth outcomes to strengthen gradually.

* Outlook is supported by lower interest rates, recent tax cuts, a depreciation of the Australian dollar, a brighter outlook for the resources sector investment, some stabilisation of the housing market and ongoing high levels of investment in infrastructure.

* A major uncertainty is US-China trade dispute, which poses a "significant risk to the global economy".

* Some slowing in employment growth is expected, but the unemployment rate set to move lower to reach 5 per cent again in 2021.

* Upward pressure on wages growth over the next couple of years is likely to be "only quite modest" and lower than earlier expected.

* Over 2020, inflation is forecast to be a little under 2 per cent and over 2021 it is expected to be a little above 2 per cent.

* Reasonable to expect an extended period of low interest rates in Australia.

* Economy needs more infrastructure spending, taking advantage of low interest rates, and structural reforms.