Australia Macro Service > Australia Data Insights
As widely expected, the RBA Board kept the cash rate unchanged at 1.5% at its May meeting. The RBA’s central forecast is for headline inflation to be slightly above 2% in 2018, broadly similar to our baseline forecast. But this will be partially driven by a number of one-off factors including an excise tax hike on tobacco and higher food prices. With slack still to be absorbed in the labour market, we see core inflation holding at around 2% in the near term, and we expect the RBA to stay on the side-lines until the second half of 2019.
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