The RBA monetary policy outlook indicates that inflation is expected to remain above the midpoint of the Reserve Bank of Australia’s 2% to 3% target range until early 2028, as domestic price pressures and energy costs linked to the Middle East conflict keep near-term inflation elevated.
In its August Statement on Monetary Policy, the central bank said overall spending appeared to be moderating and housing prices had fallen noticeably. It said the labor market remained strong, although unemployment had risen slightly this year.
RBA Monetary Policy Outlook Points to Slower Growth
The bank expects economic activity to slow during the year as earlier interest-rate increases increasingly affect demand. Employment growth is projected to ease, while the unemployment rate is expected to rise gradually.
The Monetary Policy Board left its cash-rate target unchanged at 4.35% at its August meeting. The board said it had raised the rate three times since the beginning of the year and would assess how the economy responds to those moves.
The RBA monetary policy outlook underscores the bank’s focus on bringing inflation back to target while monitoring the expected cooling in spending and labor-market conditions.
