MELBOURNE, Nov 5 (Reuters) - Australia's economy is making progress in shifting away from mining-led growth aided by very accommodative monetary policy that was likely to stay that way for some time yet, a top central banker said on Thursday.
In a generally optimistic speech, Reserve Bank of Australia (RBA) Governor Glenn Stevens also downplayed fears that recent rises in mortgage rates by the big banks would do harm to the economy and needed to be offset with a cut in the official cash rate.
"It would be good if the growth was a bit stronger, but nonetheless over the past year the non-mining side of the economy has generated respectable growth in employment," Stevens told an economics conference. "The 'rebalancing' is occurring."
Earlier this week the central bank skipped a chance to cut rates but did note that subdued inflation meant there was scope for a move, a point Stevens reiterated.
"Were a change to monetary policy to be required in the near term, it would almost certainly be an easing, not a tightening. The rate of CPI inflation is clearly no impediment to easing," he said.
Then again, he noted that business surveys pointed to improving conditions outside of mining and that the drag from a downturn in resource investment was about half way through.
"The headwinds from that source are about as intense now as they are likely to get," he said referring to mining.
Stevens estimated the recent rise in mortgage rates by banks was equal to about taking away one quarter of the 50 basis points of official cuts delivered so far this year.
"My preliminary assessment is that the macroeconomic effect of these actions in themselves may not be large," he said, adding that the RBA would keep this matter under careful review.