RBA Sees Inflation Cooling Faster Amid Ongoing Economic Risks

The Reserve Bank of Australia (RBA) has updated its economic forecasts in its quarterly Statement on Monetary Policy. The RBA expects inflation to ease back to the 2%-3% target band in the second half of next year, with consumer price inflation projected to slow to 3.6% by the end of the year and to 2.6% by the end of 2027.

The bank also expects underlying inflation, a trimmed mean measure closely watched by the RBA, to slow to 3.3% by the end of the year, from a peak of 3.6% last quarter. It was seen falling back to 2.4% by mid-2028.

The labour market is expected to ease further, with the jobless rate now forecast to peak at 4.8% by mid 2028, up from 4.7% previously. Economic growth is also expected to slow to a below-trend rate of 1.4% by the end of the year.