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ANZ: Australia's Growth Downgrade Doesn’t Change The Policy Outlook

AUSTRALIA

ANZ note that they have downgraded their “Australian GDP forecast to 1.5% Y/Y by end-2023 (prev: 1.8%) but expect Australia will avoid recession this cycle.”

  • “The labour market, wages growth and the path of inflation will determine the extent of RBA tightening in 2023. We have pared our forecast peak for headline CPI inflation to 7.8% Y/Y in Q4 2022 (prev: 8.0%) but underlying inflation will be particularly sticky in our view.”
  • “An extended period of restrictive rates will be required to bring inflation back to target, notwithstanding the slower growth trajectory. We see the cash rate peaking at 3.85% by May 2023 with no cuts until late-2024.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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