The Reserve Bank of Australia (RBA) released its Statement on Monetary Policy on Friday. The central bank expects the Australian economy to expand faster. The economy is expected to grow 2.25% - 3.25% by the end of 2016 and 2017, and 3% - 4% in mid-2018.

The inflation in Australia is expected to be 2% by the end of 2016 and 2% - 3% by the end of 2017 and by mid-2018.

The RBA hinted that further monetary policy easing may be needed.

"Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand," the central bank said.

The RBA noted that the slowdown in the Chinese economy could spill over to other economies in the region.