The local economy is not as robust as its seems and projected growth could falter down the line in the current year as indicated by the latest Reserve Bank of Australia (RBA) decision to hold off any rate movements for the month of July on Tuesday.

In a statement the central bank released following its board meeting yesterday, RBA governor Glenn Stevens said that apart from the expected boost to be delivered by the mining industry, the Australian economy in general will likely see a steady movement at best, or even a downtrend.

Stevens stressed that over the medium term, "overall growth is still likely to be at trend or higher if the world economy grows as expected," yet he noted that "growth through 2011 is now unlikely to be as strong as earlier forecast."

The RBA indicated that its growth projections may have to be downgraded in light of the moderating inflation rate and local consumers continuing attitude of holding much longer to their disposable incomes.

That should mean the RBA board will opt to suspend any rate hikes over the next few months.

Despite the picture it paints, the RBA maintained that all aspects of inflation, underlying and headline, were all reined in, as the central bank added that CPI inflation will remain close to projections over the following 12 months.

On the other hand, underlying inflation, according to Stevens, will be "at the bottom half of the target range, though a gradual increase is expected over time."

With all economic indicators carefully considered, the RBA said "that the currently mild restrictive stance of monetary policy remained appropriate ... (though) in future meetings the board will continue to assess carefully the evolving outlook for growth and inflation."

Analysts are one in agreement that the same policy will be handed down by August and will probably remain that way though much of 2011, or at least until the 'two-speed economy' continues to characterise the local economic activities.

It is likely too that the RBA will see fit to revise its growth forecast as latest numbers yielded by the Australian economy indicate cautious movement, experts said, which is a trend largely compounded by the debt issues hammering the major economies in Europe and that of the United States.