Reserve Bank of Australia Holds the cash rate at 4.35%
Points from the Statement by the Reserve Bank Board: Monetary Policy Decision
Inflation remains high at 4.1%,
Goods price inflation remained lower than its November forecast.
Services price inflation, however, declined at a more gradual pace in line with the RBA’s earlier forecasts and remains high.
Wages growth has picked up but is not expected to increase much further and remains consistent with the inflation target.
Inflation is still weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment.
“The outlook is still highly uncertain.”
The central forecasts are for inflation to return to the target range of 2–3 per cent in 2025, and to the midpoint in 2026.
Employment is expected to continue to grow moderately, and the unemployment rate and the broader underutilisation rate are expected to increase a bit further.
services price inflation has remained persistent and the same could occur in Australia.
uncertainty around the outlook for the Chinese economy and the implications of the conflicts in Ukraine and the Middle East.
lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time of excess demand, and while the labour market remains tight
, the outlook for household consumption also remains uncertain.
Returning inflation to target is the priority.
To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
While recent data indicate that inflation is easing, it remains high.
The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.
The Expatriate always tries to make sure all information is accurate. However, when reading our website, please always consider our Disclaimer policy.
