The Reserve Bank of Australia said in its monetary policy statement that higher interest rates are likely to be more favorable at some point. The main points of the monetary policy statement were as follows:
- Core inflation expectations for 2018 were raised from 1.75% to 2%.
- GDP is expected to grow by 3.25% by December 2018 and 2019.
- GDP is expected to reach 3% by mid-2020.
- The higher rates will be more appropriate if the economy improves than expected.
- A significant appreciation in AUD would dampen growth and inflation
- Unemployment forecast were raised from 5.25% to 5.5%.
- The data indicates that the economy is currently growing around 2.75%.
- Data revisions show more resilient household consumption.
- Economic growth for Q1 looks to have picked up, partly thanks to exports.
- Significant escalation of trade protectionism could derail global growth.
