Rba’s Latest Forecasts Are Grim. Here Are 5 Reasons Why

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misbahulalam
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Rba’s Latest Forecasts Are Grim. Here Are 5 Reasons Why

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After lifting interest rates for a record nine times in a row, and flagging more raises still to come, the Reserve Bank of Australia’s latest set of forecasts make for grim reading. The forecasts are part of the central bank’s quarterly Statement on Monetary Policy, its main communication (aside from interest rates) on how it sees the economy faring over coming few years. The bad news is the bank tips economic growth to slow, inflation to remain high, spending to stagnate, unemployment to increase, and real wages to fall further. The good news is that it could be wrong.

1. Growth is expected to slow The central bank expects Australia’s economy to slow this year due to rising interest rates, higher cost of living, and declining house prices. It tips GDP growth for 2022 will be 2.75% (the Australian Bureau of Statistics won’t publish this data until March), and 1.5% over 2023 and 2024. This compares to the RBA’s expectation three months ago of 3% growth in 2022, but is the same as the previous prediction for this year and the next. RBA GDP growth forecasts Confidence intervals reflect RBA forecasting errors since 1993. Year-end forecasts. RBA 2. Inflation will remain high Phone Number List The bank says inflation, which hit 7.8% in 2022, is likely to have peaked and will stay high for several months, but should decline to 4.5% by the end of 2023.

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By mid-2025 the bank expects inflation to have fallen to back to 3% – the top end of its inflation target range of 2-3%. However, the pace of this fall depends on wages and prices. The bank acknowledges inflation could fall more quickly or more slowly. RBA headline inflation forecasts Confidence intervals reflect RBA forecasting errors since 1993. Year-end forecasts. RBA Australian consumer price inflation has been high due to factors including global supply-chain disruptions caused by the pandemic, Russia’s invasion of Ukraine, strong domestic demand, a tight labour market, and capacity constraints.
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