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The Reserve Bank of Australia Friday upgraded its forecasts for economic growth through the year 2010, hinting its round of rate cuts is at an end.
The RBA's latest Quarterly Monetary Policy Statement notes the global economy "is stabilizing after contracting sharply" in the previous two quarters.
The central bank forecast economic growth of about 0.5 percent for calendar year 2009, compared to its previous forecast of a 1.0 percent contraction.
Australia has managed to avoid a technical recession of two straight quarters of contraction, with the December 2008 quarter the only one registering a decline, contracting by 0.6 percent.
The March quarter showed growth of 0.4 percent.
The RBA predicted economic growth of 1.0 percent for the year to June 2010 and 2.25 percent for the full calendar year 2010. Previously, it forecast mid-year growth of 0.5 percent and full-year growth of 2.0 percent.
Inflation, it said, was expected to continue moderating. The statement said further reductions in its cash interest rate from its current 49-year-low of 3.0 percent appear unlikely.
"The recent stronger-than-expected economic data and the general improvement in sentiment both in Australia and abroad have reduced the likelihood that a further reduction will be required,'' the RBA said.
The RBA last Tuesday left interest rates unchanged for the third straight month.
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