The Reserve Bank of Australia’s latest economic assessment shows that unemployment is expected to fall further and wage growth is expected to accelerate, but house prices are set to fall further.
The RBA on Friday lowered its unemployment rate forecast for the December quarter to 3.25% from 3.75% in May in its quarterly statement on monetary policy.
Wage growth is expected to reach 3.5% by the middle of next year.
“The increase in average working hours, which is below pre-pandemic trends, is also expected to provide a significant adjustment margin to meet strong labor demand,” the statement read.
The Treasury expects a 3.75% rise in 2022-2023 and a 3.75% unemployment rate.
Meanwhile, the RBA expects house prices to fall further.
“Consumption growth is projected to slow as higher prices and higher net interest payments weigh on real disposable income growth, and falling house prices reduce household net worth,” the statement said. there is
“Household savings rates are expected to decline during the forecast period to just below the average levels of the pre-pandemic years.”
The Australian economy is forecast to grow 3.25% this year before slowing.
“The slowdown in growth is expected to be driven by slower growth in household consumption,” the statement said.
Domestic retail gas and electricity prices are also expected to rise by 10-15% this year.
The RBA has raised interest rates by half a percentage point to 1.85% this week.
first published as RBA reveals unemployment forecasts in latest economic assessment
Release of RBA Statement on Monetary Policy
Source link Release of RBA Statement on Monetary Policy