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.