RBA Sees Inflation Cooling Slightly Faster Amid Middle East Tensions

Australia's central bank has updated its forecasts for inflation and economic growth. The Reserve Bank of Australia (RBA) expects cost pressures to cool a little faster than previously thought, but still sees risks on the upside due to tensions in the Middle East.

The RBA made only modest changes to its forecasts out to 2028, with economic growth seen as a little more resilient and inflation a little cooler. Unemployment is expected to remain stable around the current 4.4% before rising to 4.8%.

The bank expects subdued growth in demand to bring the economy into balance next year, which will help reduce inflationary pressures. The housing market has weakened more than expected, weighing on household consumption and dwelling investments.