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Economists Survey Raises 2021 CPI Forecast To 4.9%

AUSTRALIA: Bank desk views on the upcoming Australian CPI Release:
- ANZ: We expect inflation has stabilised a little below the RBA's 2-3% policy
target band. Seasonal increases in education, childcare, and pharmaceutical
products will add to headline CPI in Q1, but are expected to be offset by
seasonal falls in the prices of international holiday & accommodation and fresh
fruit & vegetables. Petrol prices were broadly flat in the quarter. Retail price
deflation remains a key theme.
- CBA: The Q1 CPI figures should confirm that the underlying pulse of inflation
in Australia remains weak. Soft wages growth, underpinned by elevated spare
capacity in the labour market, means that both headline and core inflation
should print at the bottom of the RBA's 2-3% target band. Our forecast profile
has underlying inflation remaining anchored at 2% until Q4 2018. Monetary policy
will likely remain on hold until it is clear that wages growth is on a sustained
upward trend. That means that the cash rate should remain unchanged for at least
the next sixth months.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |