The leap in GDP in Australia in the first quarter doesn’t significantly alter the outlook for underlying inflation, especially if we are right in thinking that economic growth will drop back below the economy’s potential rate later this year. This explains why we still expect the RBA to cut interest rates to 1.5% in August and why we now believe that rates may even fall to 1.0% next year.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.