Risks around inflation are broadly balanced, but much depends on inflation expectations.
Inflation is moving in the right direction, consistent with reaching target by late 2025.
Policy has been tightened significantly,the full impact has yet to be felt.
The board is mindful of lags in policy and the painful financial squeeze on some households.
The board is keen to preserve gains made in the labour market.
Tightening could provide some further insurance against upside inflation risks.
Global growth seen well below average over the next two years.
Outlook for China has been revised lower, a downside risk for export prices.
Forecasts:
Forecasts GDP at the end of 2023 at 0.9%, end 2024 1.6%, end 2025 2.3%.
Forecasts CPI at the end of 2023 at 4.1%, end 2024 3.3%, end 2025 2.8%.
Forecasts trimmed mean inflation at the end of 2023 at 3.9%, end 2024 3.1%, end 2025 2.8%.
Forecasts unemployment at the end of 2023 at 3.9%, end 2024 4.4%, end 2025 4.5%,.
Forecasts assume cash rate of 4.25%, falling to 3.25% by end 2025.
Forecasts wage growth at the end of 2023 at 4.1%, end 2024 3.8%, end 2025 3.6%.
