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Stronger Q1 CPI Mainly Missed April Bloomberg Survey

AUSTRALIA
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Bloomberg’s April survey of Australian economists showed little change in their expectations but the survey was taken between April 18 and 24 and the higher-than-expected Q1 read printed on April 24 and so is unlikely to be included in most of the responses. Consensus still expects a 25bp rate cut in Q4 with 75bp over 2024. This may be revised in the next survey.

  • There is some change in the timing of rate cuts with the 50bp expected in Q1 2025 in the previous survey revised to one 25bp in Q1 with another following in Q2.
  • The growth outlook is unchanged at 1.4% in 2024 picking up to 2.2% in 2025. Q1 2024, released on June 5, is forecast to rise 0.3% q/q.
  • 2024 inflation is still expected to ease to 3.3% before falling below target next year averaging 2.8%. Wages are still forecast to rise by 3.8% this year and then 3.4% in 2025. The May 14 budget should give some indication of what the government is expecting for the July 1 minimum wage rise.
  • Unemployment rate forecasts were revised down 0.1pp for 2024 to 4.2% with Q4 still 4.5%. 2025 remains at 4.6%.
  • The budget deficit expectations have widened 0.2pp in 2024 to 0.5% of GDP with 2025 unchanged at 0.7%.
  • A large pickup in housing starts is projected for 2025 with growth at 10.5% y/y revised up from 6.4% and following a 2.5% drop this year.
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Bloomberg’s April survey of Australian economists showed little change in their expectations but the survey was taken between April 18 and 24 and the higher-than-expected Q1 read printed on April 24 and so is unlikely to be included in most of the responses. Consensus still expects a 25bp rate cut in Q4 with 75bp over 2024. This may be revised in the next survey.

  • There is some change in the timing of rate cuts with the 50bp expected in Q1 2025 in the previous survey revised to one 25bp in Q1 with another following in Q2.
  • The growth outlook is unchanged at 1.4% in 2024 picking up to 2.2% in 2025. Q1 2024, released on June 5, is forecast to rise 0.3% q/q.
  • 2024 inflation is still expected to ease to 3.3% before falling below target next year averaging 2.8%. Wages are still forecast to rise by 3.8% this year and then 3.4% in 2025. The May 14 budget should give some indication of what the government is expecting for the July 1 minimum wage rise.
  • Unemployment rate forecasts were revised down 0.1pp for 2024 to 4.2% with Q4 still 4.5%. 2025 remains at 4.6%.
  • The budget deficit expectations have widened 0.2pp in 2024 to 0.5% of GDP with 2025 unchanged at 0.7%.
  • A large pickup in housing starts is projected for 2025 with growth at 10.5% y/y revised up from 6.4% and following a 2.5% drop this year.