Inflation
Inflation is falling but is still high. It is important to bring inflation down because high inflation hurts all Australians. The Board’s interest rate decision supports the gradual return of inflation to the midpoint of our 2–3 per cent target range.
Inflation is expected to decline to the 2–3 per cent target range in 2025 and to reach the midpoint in 2026.
GDP Growth
Australia’s economy eked out modest growth at the end of 2023 as consumers drew down savings to keep spending, fuelling hopes of a near-term rebound as inflation ebbs, tax cuts arrive, and the Reserve Bank starts cutting interest rates.
The country’s gross domestic product in the December quarter posted a 0.2% rise compared with the previous three months, the Australian Bureau of Statistics reported on Wednesday. At an annual rate, GDP rose 1.5%.
Economists had expected quarterly growth to maintain at its 0.2% pace in the final three months of 2023. Compared with a year earlier, they expected 1.5% growth – also matching the official outcome.
As expected, a rise in exports and a drop in imports contributed the most to the quarterly growth tally, at 0.6 percentage points. A drop in stocks held by companies shaved 0.3% to be the main drag.
Households managed to increase overall spending 0.1% while cutting back on discretionary outlays. Rising income and additional government spending on benefits also helped lift the household saving-to-income ratio to 3.2% – ending two years of falls.
Copyright © 2024 Coastline Private Wealth, All rights reserved.
Our mailing address is:
PO Box 2082
Churchlands WA 6018
