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Bloomberg Consensus Continues To See Q4 Rate Cut

AUSTRALIA
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Bloomberg has released its May economist survey showing that most still expect a soft landing with the probability of a recession at around 30%. The survey was taken between May 16 and 21 and so includes the last RBA meeting and the federal budget. There were few revisions from the April survey.

  • Consensus’ rate profile is unchanged with a 25bp cut expected in Q4 with another one in Q1. Q2 2025 only has 15bp of easing. Rates are forecast at 3.35% at end-2025.
  • 2024 CPI has been revised up 0.1pp to 3.4% y/y with 2025 unchanged at 2.8%. Q4 2024 is 0.1pp higher at 3.2%, below the RBA’s 3.8%, and Q2 2025 is unchanged at 2.9%, lower than the RBA’s 3.2%.
  • 2024 GDP growth is slightly lower at 1.3% but 2025 is unchanged at 2.2%. Consensus expects Q1 and Q2 to rise by 0.3% q/q before rising towards 0.6% by H1 2025. Private consumption is unrevised at 0.8% for this year and 2.1% for next. GFCF was revised higher across the forecast horizon.
  • The unemployment rate is still forecast at 4.1% for Q2 but it is now expected to peak at 4.5% rather than 4.6%.
  • The budget deficit has been revised lower for 2024 to -0.1% from -0.5% of GDP but 2025 is 0.1pp higher at -0.8%, a relatively minor adjustment given the increase in government spending announced.
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Bloomberg has released its May economist survey showing that most still expect a soft landing with the probability of a recession at around 30%. The survey was taken between May 16 and 21 and so includes the last RBA meeting and the federal budget. There were few revisions from the April survey.

  • Consensus’ rate profile is unchanged with a 25bp cut expected in Q4 with another one in Q1. Q2 2025 only has 15bp of easing. Rates are forecast at 3.35% at end-2025.
  • 2024 CPI has been revised up 0.1pp to 3.4% y/y with 2025 unchanged at 2.8%. Q4 2024 is 0.1pp higher at 3.2%, below the RBA’s 3.8%, and Q2 2025 is unchanged at 2.9%, lower than the RBA’s 3.2%.
  • 2024 GDP growth is slightly lower at 1.3% but 2025 is unchanged at 2.2%. Consensus expects Q1 and Q2 to rise by 0.3% q/q before rising towards 0.6% by H1 2025. Private consumption is unrevised at 0.8% for this year and 2.1% for next. GFCF was revised higher across the forecast horizon.
  • The unemployment rate is still forecast at 4.1% for Q2 but it is now expected to peak at 4.5% rather than 4.6%.
  • The budget deficit has been revised lower for 2024 to -0.1% from -0.5% of GDP but 2025 is 0.1pp higher at -0.8%, a relatively minor adjustment given the increase in government spending announced.