(Bloomberg) -- Australia’s central bank could cut interest rates three more times and adopt unconventional monetary policies unless the government reverses course and deploys fiscal stimulus, National Australia Bank Ltd. says.

The Reserve Bank will ease in November and February, when it will signal a move to alternative measures in response to rising risks at home and abroad, NAB said. That would most likely involve government bond purchases, or quantitative easing, it predicted.

However, the economy needs additional fiscal stimulus, either through new infrastructure investment or bringing forward planned tax cuts, NAB said. Treasurer Josh Frydenberg maintains that tax rebates being delivered now are sufficient.

“Unless something meaningful is done on fiscal stimulus, we think the RBA could cut the cash rate further to 0.25% by mid-2020, simultaneously undertaking unconventional monetary policy,” NAB chief economist Alan Oster said Wednesday. The RBA has said that would most likely involve buying government bonds, “but we anticipate additional steps, such as long-dated repurchase agreements to lower bank funding costs.”

Oster’s call comes as business and consumer surveys in the past 24 hours showed sentiment deteriorating across the board, suggesting the economy’s 12-month slowdown shows no sign of abating. Australians are struggling with record-high household debt and weak wage growth, prompting them to cut back spending. RBA chief Philip Lowe cut rates in June and July to try to support growth, but so far the only sector that’s impacting is property.

“Our internal data suggest that rate cuts and tax refunds have done little to boost consumer spending,” Oster said. “House prices have picked up in a number of cities, which should help limit further wealth effects on consumer spending, but leading indicators suggest that the sharp downturn under way in residential construction could be deeper than previously forecast.”

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Chris Bourke, Victoria Batchelor

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