The Reserve Bank of Australia (RBA) signaled on Tuesday that highly anticipated consumer inflation data could be the trigger for cutting the official interest rate.
The minutes of the RBA's October 4 board meeting released on Tuesday showed that the RBA board was waiting for more information on inflation before considering taking action to stimulate the economy by cutting the cash rate from its current level of 4.75 percent.
The September quarter inflation figures are due out on October 26.
"While there remained good reasons to expect solid growth over the medium term, indications were that the pace of near-term growth was unlikely to be as strong as earlier expected, reflecting both global and local factors," the RBA minutes said.
Despite the strong rebound of the mining sector, the RBA acknowledged that growth in other parts of the economy was subdued.
"Conditions remained weak in the manufacturing, construction, wholesale and retail sectors," it said.
"The housing market remained subdued, with housing prices having fallen by three per cent over the year to August."
The RBA said that business confidence in Australia had fallen noticeably and growth in business credit remained weak."
"Members believed that an improved inflation outlook, if confirmed by further data, would increase the scope for monetary policy to provide some support to demand, should that prove necessary," the RBA minutes said.
Most economists agree consumer inflation data for the September quarter will be a critical factor in the RBA board meeting on November 1.