The SoMP is due at 0030 GMT on 4 February 2022.
Remarks from Westpac's preview on what to expect. WPAC says the "most significant part ... will be the Bank’s revised forecasts ... GDP; the unemployment rate; inflation and wages"
- we expect that the GDP growth forecast for 2022 (which was 5.5% at the November forecast) will only be “shaved” by 0.5% (due to omicron uncertainties) to a very strong 5.0% in the February update.
- move the “trimmed mean” inflation forecast of 2.25% for 2022 to 2.5% and hold the 2.5% forecast for 2023
- while the sharp fall in the unemployment rate to 4.2% might be seen to be subject to some statistical correction in the early months of 2022 we expect the RBA should be prepared to make a 4% unemployment rate forecast for the second half of 2022
- The 2022 forecast for growth in the Wage Price Index should be lifted from 2.5% to 3.0% although there is a risk that a cautious Governor might opt for 2.75% to discourage markets from sensing a degree of urgency in raising rates. He could also point to ongoing COVID risks, with the recent omicron wave, seen to be a source of uncertainty around wages growth. And to guard against any commitment to respond quickly to an unexpectedly strong print on the Wage Price Index for December (to be released late February) he could point out that considerable further evidence will be required before he would be convinced that Australia’s long period of wages underperformance has passed.
