Australia Macro Service > Australia Data Insights

No April Fools from the RBA

As expected, the RBA kept the cash rate unchanged at 1.5%. Stagnant wage growth and uncertainty surrounding household consumption continues to feature on the agenda, while a positive outlook on employment growth and business investment also remains.

The RBA's central forecast is for headline inflation to be slightly above 2% in 2018. However, this will partially be driven by a number of one-off factors including an excise tax hike on tobacco, and higher food prices. With growth in GDP still tracking below potential and slack still to be absorbed in the labour market, underlying inflation is likely to stay at the bottom of (or even below) the RBA's 2-3% target band. We expect the RBA to stay on the side-lines until the second half of 2019. ​

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