RBA Chief Says Mining Investment Boom to Peak
08/23/2012| 08:36pm US/Eastern
SYDNEY--Reserve Bank of Australia Governor Glenn Stevens said Friday mining investment will peak over the next year or two but that should be offset by a subsequent pickup in exports.
"The peak of the resource investment boom as a share of GDP--the highest such peak in at least a century--will occur within the next year or two," Mr. Stevens told lawmakers in a testimony.
"After that the rate of resource investment is likely to decline, while the export shipments of the resources themselves will pick up," he said.
His remarks follow a week of negative news for the resources sector as iron ore prices--a key export from Australia--continue to slide and mining giant BHP Billiton Ltd. (>> BHP Billiton Limited) said it was scaling back major expansion plans.
The governor remains upbeat on his outlook for domestic growth and the bank can respond if the global outlook darkens, he said.
Mr. Stevens again acknowledged the strong exchange rate and added its dampening impact on inflation could soon wane.
Write to Enda Curran at firstname.lastname@example.org
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