The Reserve Bank (RBA) meets on Tuesday and is almost certain to keep its policy rate on hold at 4.5%, given that Q2 consumer price data were softer than expected. Nonetheless, the mining boom will bring above-trend GDP growth over the next few years and there is already little spare capacity in the economy. The upshot is that inflation is still likely to trend higher later this year and in 2011. Therefore, we expect the RBA to resume its tightening cycle in Q4.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services