Mining boom boosts entire economy: RBA

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The mining boom benefits the entire Australian economy and is unlikely to derail other industries, according to the Reserve Bank.

In a Sydney speech yesterday RBA deputy governor Philip Lowe said high resources prices and booming investment from the mining industry will continue to help Australia.

Lowe said the development of Asia was going to take "many decades" and Australia had the resources to supply its long-term expansion.

"I think you can make a plausible case that this adjustment we’re going through is going to be very long-lasting," he said.

Lowe said the mining boom was also flowing to other parts of the economy and would continue to do so.

"In effect, there is a chain that links the investment boom in the Pilbara and in Qeensland to the increase in spending at cafés and restaurants in Melbourne or Sydney," he said.

But Lowe said the boom’s strengthening of the Australian dollar would also continue to make things difficult for the manufacturing, tourism, and education sectors.

He said despite the weakness of some industries Australia’s economic performance was still strong and the country was well-placed to deal with Europe’s debt crisis.

"We have more flexibility to deal with unfolding events than almost any other developed economy," he said.

Image: Rio Tinto

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