Swallow hard and believe this, the Reserve Bank sees a "robust' (their description) growth rate for Australia in 2011 and 2012, but doesn't see that causing too many problems.

But from that we know the bank expects to lift interest rates again, possibly twice more, hopefully in 2011.

In its third Statement of Monetary policy for the year, the bank was remarkably upbeat and confident for an organisation that only a quarter ago was intent on cutting short what it saw as dangerous inflationary tensions as the resources boom gathered pace and concerns aver resource bottlenecks.

But the impact of low wage rises, the stronger dollar and lots of poor publicity about Europe, financial problems, China's slowdown and questions about the US economy, and a slide in the stockmarket (since mostly reversed), seems to have help haul back those inflationary pressures and expectations, especially among consumers.

Now the bank sees inflation remaining under control, and growth rising to reach a 4% rate in 2012.

But unlike in the past, this will not be economic growth driven solely by consumption and demand in the domestic economy.

That means the RBA has some higher level of comfort about interest rates remaining level now, knowing that inflation will be sort of steady for the next two or three quarters.

Macquarie Bank's Rory Robertson said the RBA will "sit and wait and watch, content in the knowledge, via a range of data, that neither household demand nor non-mining activity are going anywhere fast."

"Thus a bad CPI at the end of October is needed to convert further good news on the jobs front into another RBA rate hike in 2010."

That pushes out the 'rate rise loom headline' timing until the first quarter of 2011m when the bank will be concentrating on making sure inflation in the second half of 2011 and into 2012 remains as stable as it can be.

The AMP's Dr Shane Oliver thinks we might see a rate rise by the end of 2010:

"There is little in the RBA's Statement on Monetary Policy to suggest any urgency to raise rates for the time being with uncertainty around the global outlook having increased, Australian growth around trend, underlying inflation back in the target range and lending rates around long term average levels.

"However, while current interest rates may be appropriate for now, with the RBA still forecasting growth to rise above trend over the next two years and inflation expected to bottom in the top half of the RBA's target range before starting to rise again it is clear that the Bank retains a tightening bias and so we continue to expect occasional and gradual rate hikes to resume by year end," Dr Oliver wrote on Friday.

The Reserve Bank's forecasts on Friday were simply solid and the expected growth in the economy will come mostly from the construction of the next part of the resources boom, LNG, coal and iron ore expansion projects over the next few years.

It will predominantly come from the huge resources investment boom that could account for 6% of Gross Domestic Product next year and in 2012, and a strong jobs market.

But 2012 could be a year when the strong labor market, capacity bottlenecks and solid demand run into each and threaten to set off inflation, which is why a rate rise or two early in 2011 is a likely development at the moment.

"The forecast of robust GDP growth in 2011 and 2012 is partly driven by forecasts of above-average growth in the capital stock, especially in the resources sector, and the labour force," the bank explained.

"The latter assumes both continued above-average growth in the working-age population and a modest increase in the participation rate.

"Nevertheless, from 2011 through to the end of the forecast period, some tightening of capacity is expected following the period of below-average growth in 2008 and 2009.

"The labour market is expected to tighten gradually over the forecast period.

"The outlook for overall demand is driven less by consumption than has been the case over much of the past couple of decades.

"While consumer confidence is buoyant and the labour market is strong, growth in household consumption is expected to be a little weaker than that in income.

"As a result, the saving rate is expected to rise modestly, with households being more cautious about their finances than in the past.

"Business investment is forecast to grow strongly over the forecast period, driving growth in domestic demand.

"The outlook for the business sector is positive, with signs that investment is picking up following temporary weakness in the wake of the tax incentives for equipment spending.

"Investment is also being underpinned by strong internal funding for businesses; survey measures of business profits remain at above-average levels, with the recent increases in bulk commodity contract prices providing a boost to mining profits.

"Engineering investment is expected to grow strongly over the period, reflecting the $43 billion Gorgon LNG project and a number of other significant resources projects in iron ore, coal and LNG.

"Resource exports are expected to grow strongly as a result of the earlier and ongoing significant expansions in capacity."

On inflation, the central bank says its central forecast for underlying inflation "is around 2.75% over the next year or so, similar to its current rate."

"CPI inflation is, however, likely to be above 3 per cent for the next year due to the increase in the tobacco excise and large increases in the prices of utilities.

"Beyond the next year, underlying inflation is expected to gradually increase to around 3 per cent in 2012, reflecting capacity pressures in parts of the economy."

So what are the risks to this very optimistic outlook?

The bank says that on the downside, "the main domestic risk is that the forecast pick-up in private demand does not occur as quickly as expected at a time when public investment is contracting.

"Internationally, there is some risk that the recent measures by the Chinese authorities to cool the property market will slow the Chinese economy by more than currently expected, causing commodity prices to fall and investment in Australia to be delayed.

"A significant retreat from risk taking around the world as a result of renewed concerns about the financial position of European banks and governments also remains a possibility, although the probability of this looks lower than was the case a couple of months ago.

"On the upside, it is possible that private domestic demand could be stronger than currently expected, with firms in the mining sector attempting to push ahead with investment more rapidly than assumed.

"In addition, it is possible that the current cautiousness in spending by households may not persist, particularly if the unemployment rate continues to decline.

"There is also a risk that growth in the global economy surprises on the upside, as it has done over much of the past year."