Reserve Bank of Australia Statement on Monetary Policy
Headlines via Reuters:
- board committed to maintaining highly supportive monetary policy
- do not expect to meet unemployment, inflation goals until 2024 at the earliest
- raises GDP forecast for 2020, lowers unemployment forecasts out to 2022
- even with upgraded forecasts, unemployment and inflation still seen too low by mid-2023
- even in upside risk scenario underlying inflation still below 2% by mid-2023
- forecast y/y GDP growth -2% dec 2020, 3.5% dec 2021, 3.5% dec 2022, 3% June 2023
- forecast unemployment 6% dec 2021, 5.5% dec 2022, 5.25% June 2023
- forecast wage price index 1.5% dec 2021, 1.75% dec 2022, 2% June 2023
- forecast underlying inflation 1.25% dec 2021, 1.5% dec 2022, 1.75% June 2023
- forecasts assume no change in cash rate, stimulus package in line with Feb statement
- forecasts assume Australian international borders closed until at least end of 2021
- likely unemployment has already peaked, end of jobkeeper support is one uncertainty
- key uncertainty is how consumption responds to tapering of some government fiscal support
- high commodity prices have put upward pressure on a$
- trade surplus to be significantly higher than previously assumed due to rise in terms of trade
- long-term Australian bond yields about 30 bps lower because of qe buying program
Link to the full SoMP:
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- The Statement on Monetary Policy sets out the Bank's assessment of current economic conditions, both domestic and international, along with the outlook for Australian inflation and output growth. A number of boxes on topics of special interest are also published. The Statement is issued four times a year.
