In the Statement on Monetary Policy, RBA noted that after a sequence of 50bps and 24bps rate hikes, “the Board recognised that interest rates had already been increased significantly in a short period of time”.
“In an uncertain environment, slowing the adjustment of policy allows time to assess the effects of the increases to date and the evolving economic outlook,” it added.
The Board expects that “interest rates will need to increase further”, but “monetary policy is not on a pre-set path”. The size and timing of future interest rate hikes will be determined by incoming data and assessment of the outlook of inflation and labor market.
In the new economic projections, year-average GDP growth forecast for:
- 2022 was left unchanged at 4%.
- 2023 was downgraded from 2.25% to 2.00%.
- 2024 was downgraded from 1.75% to 1.50%.
Year-end forecasts for headline CPI for:
- 2022 was revised up from 7.75% to 8.00%.
- 2023 was revised up from 4.25% to 4.75%.
- 2024 was revised up from 3.00% to 3.25%.
Year-end forecasts for trimmed mean CPI for:
- 2022 was revised up from 6.00% to 6.25%.
- 2023 was left unchanged at 3.75%.
- 2024 was revised up from 3.00% to 3.25%.
Year-end forecasts for unemployment rate for:
- 2022 was revised up from 3.25% to 3.50%.
- 2023 was revised up from 3.50% to 3.75%.
- 2024 was revised up from 4.00% to 4.25%.
