The Reserve Bank of Australia trimmed its near-term inflation forecast but broadly maintained its growth projections.
In its quarterly Statement on Monetary Policy, released Friday, the forecasts for domestic output growth were broadly similar to those presented in the May Statement. GDP growth is seen at an average 3.25 percent percent over 2018 and 2019. Growth is then expected to ease to around 3 percent in 2020.
The economy is not expected to encounter broad-based capacity constraints for some time. However, the risks to global growth from trade protectionism have increased, the bank noted.
The June quarter inflation outcomes were in line with the forecasts in the May Statement. However, the forecasts for headline and underlying inflation in the September quarter have been revised down.
Both headline and underlying inflation are now expected to be around 1.75 percent in the second half of 2018. Headline and underlying inflation are then expected to increase gradually to 2.25 percent by mid 2020, which was unchanged from the May Statement.
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