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Australian Economic Developments - Monetary Policy
Inflation in Australia is currently too high, at 6.9% in the year to October. There are many global factors that are behind the high inflation in Australia. Returning inflation to target requires a more sustainable balance between supply and demand. The increase in inflation is expected to continue in the coming months, with inflation forecast to reach 8% in the year to December quarter. Inflation is also expected to ease next year due to the impact of ongoing global supply-side issues and recent declines in some commodity prices and slowing demand growth.
Australian Monetary Policy
Medium-term inflation expectations remain well anchored. The Bank’s central forecast is for CPI inflation to ease over the next few years to just above 3% in 2024. The Australian economy continues to grow and is expected to moderate over the next year as the global economy slows and a rebound in spending on services runs its course. Household consumption growth has slowed as financial conditions tighten. The Bank expects growth to pick up by around 1 ½ per cent in 2023 and 2024.
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Employment growth has also slowed as spare capacity in the labour market is absorbed. Wage growth has also been low for several years and further improvement is expected given the tight labour market and higher inflation. Given the importance of avoiding a wage-price spiral, the Australia Council continues to monitor the evolution of labour costs and corporate pricing behaviour over the coming period.
Monetary Policy Decisions By The Australian Council
The Australian Board also acknowledged that monetary policy is operating slowly from interest rate increases yet to be felt in mortgage repayments. Household spending is expected to slow over the period ahead although the timing and extent of this slowdown remains uncertain. Another source of uncertainty comes from the worsening global economic outlook. In this regard, the Board is seeking to keep the economy balanced in these difficult times and return inflation to target. The Board expects to raise interest rates further over the period ahead, but not on a predetermined path. It is closely monitoring the global economy, household spending and wages and pricing behaviour. The size and timing of future interest rate increases will be determined by incoming data as well as the Board’s assessment of the inflation and employment outlook. The Board remains steadfast in its determination to return inflation to target and will do what is necessary to achieve this. That is the information we share regarding Australian monetary policy decision information. Keep up to date with information related to investment and other forex trading through the GIC journal every day. Of course, you can also trade through the GICtrade application with the new ECN account feature, enjoy your trading with the lowest spread prices starting from 0 Rupiah! You also have the opportunity to win billions of Rupiah in prizes without a draw through the GIC Gebyar Hadiah.
