Australia's central bank is out with its quarterly statement, declaring that Australia's $1.95 trillion economy is "gradually coming out of a soft patch".

Earlier this week, the RBA kept interests rates on hold.  But the report says that it is running out of room to slash interest rates further, and that additional rate cuts might backfire by hurting consumer sentiment.

Additionally, wage growth is predicted to grow just 2.3 percent up to the end of 2021. 

"Spare capacity is expected to remain in the labour market over the next couple of years," said RBA governor Philip Lowe.  "Consistent with this outlook wages growth is low and shows little sign of picking up," he added.

"Faster wages growth would be needed for inflation to be sustainably within the 2-3 per cent target range," said Dr. Rowe.