Marion Kohler, the Reserve Bank of Australia's Head of Economic Analysis, speaking at the Australian Business Economists Annual Forecasting Conference in Sydney.
Headlines via Reuters:
- Inflation coming down but still too high
- It will take some time for inflation to get back within the 2-3% target range
- Expect it to return to target range in 2025, and to the midpoint in 2026
- Services inflation high and broadly based, likely to decline only gradually
- Expect economic growth to remain subdued in the near term
- High inflation, higher tax payments and interest rates have significantly reduced household incomes
- Most labour market indicators still look ‘tight’ relative to historical norms
- Seeing signs of easing wage pressures in some industries, particularly in business services
- Expect much of adjustment in labour market to happen via drop in average hours worked
There is not anything surprising in these remarks. Kohler hedge a little on those 'return to target' inflation time projections"
- "I'd like to stress that there is substantial uncertainty around forecasts that far out"
Kohler also said that the expected slowdown in inflation would require a recovery in productivity. Australian productivity has been very subdued in the last few years, but Kohler is optimistic it'd improve once temporary factors related to the COVID-19 pandemic played out.
Huh. We'll see.
