The Reserve Bank of Australia's new.............>

RBA: The Reserve Bank of Australia's new description of spare capacity in the

economy this week which places it in the context of growth, points to an uptick

in its inflation outlook when the central bank publishes its latest forecasts

Friday.

- In the cash rate statement Tuesday, the RBA talked about the central forecast

for growth to pick up a bit above 3% this year and the next, and said that "this

should see some reduction in spare capacity in the economy."

- This notable reference to growth marks the RBA discussing spare capacity

beyond its usual labour market terms, though the central bank's caution over the

pass-through between reduced slack and consumer price inflation should also be

noted.

- It therefore remains unclear if the RBA's forecast for inflation in June 2020

will be revised up to 2.5% when its updated projections are published on Friday

in the quarterly Statement on Monetary Policy. In February, the RBA saw both

headline and underlying inflation at 2.25% by June 2020.

- MNI - For Full Story See Main Wire At 05:10 BST 05/03