Australia's Economy Hits Speed Limit

The Australian economy grew by 2.1% last year, according to national accounts data released today. However, Professor Richard Holden from UNSW Business School says that despite this growth, the economy is actually 'over the speed limit' due to negative productivity growth.

'It's not great relative to history,' Mr Holden told News24 host Chris Kenny.

The Reserve Bank of Australia has indicated that it considers 2.1% annual growth to be too fast, given the current economic conditions.

As a result, Professor Holden predicts that interest rates may need to rise later this month.