Via Royal Bank of Canada's Sydney office, this for the coming year (in brief)
Expect GDP to firm to 2 & 3⁄4% in 2018, around trend, underpinned by
- stronger net exports,
- public spending,
- and a small improvement in business investment as momentum in global growth continues
Weaker consumption and a softer housing market will, however, temper activity
- and private final demand is likely to be soft
We do not expect employment generation next year to repeat the strong pace of 2017
- modest downward pressure will likely remain on the unemployment rate, taking it to just above 5 & 1⁄4% by end 2018
Core inflation is set to remain near 1 & 3⁄4% for much of 2018
- creeping a little higher into year-end and in 2019
This should keep the RBA on the sidelines throughout 2018.
- We expect the cash rate to rise by 25bp in Q1 and Q2 2019 to end the year at 2%
- The risk is skewed toward policy normalisation beginning in Q4 2018 amid higher global rates, an unusually long RBA pause, and signs that wages and inflation are edging slightly higher
Labour market indicators will be key in policy deliberations in 2018 and 2019
(bolding is mine)