Current assessments were that global gross domestic product (GDP) would grow at no more than average pace in 2012, with risks to the outlook still on the down side, he said in a statement after the central bank's September meeting yesterday.
"Economic activity in Europe is contracting, while growth in the United States is only modest."
Growth in China remained "reasonably robust" in the first half of the year, albeit well below the exceptional pace seen in recent years.
Around Asia generally, growth was being dampened by the more moderate Chinese expansion and the weakness in Europe, Mr Stevens said.
"Markets for key natural resources are adjusting accordingly. Some commodity prices of importance to Australia have fallen sharply in recent weeks.
"The terms of trade peaked a year ago and have declined significantly since then, though they remain historically high."
In Australia, most indicators available for the Reserve Bank's September meeting suggested growth had been running close to trend, led by very large increases in capital spending in the resources sector, he said.
The introduction of the carbon price was starting to affect consumer prices in the current quarter, and that would continue over the next couple of quarters.
The central bank's assessment was that inflation would be consistent with the target over the next one to two years, Mr Stevens said.
However, maintaining low inflation would require growth in domestic costs to remain contained as the effects of the earlier exchange rate appreciation waned.
As a result of the sequence of earlier decisions, interest rates for borrowers were slightly below their medium-term averages.
"The impact of those changes is still working its way through the economy, but dwelling prices have firmed a little and business credit has picked up this year," Mr Stevens said.
