Tuesday is likely to see the Reserve Bank of Australia (RBA) increase its benchmark interest rate by 25 basis points, bringing it up to 4.35 percent from 4.25 percent.
Despite the fact that the most recent statistics on consumer prices indicated a decrease in inflation from 6.8% in April to 5.6% in May, it nevertheless remained significantly above the range that the RBA targets, which is between 2% and 3%. This indicates the need for further measures to combat price hikes.
Economists surveyed by Reuters are split on what the Australian central bank will do next after an unexpected pause in April and subsequent hikes in May and June. Of the 31 respondents, 16 thought the Fed would raise rates on July 4 to 4.35 percent and the remaining 15 predicted the pause.
On Tuesday, major Australian banks such as ANZ, NAB, and Westpac anticipated a rate increase, although the Reserve Bank of Australia did not forecast any change in monetary policy. At the same time, the majority of the 29 experts anticipated that the central bank would hike the interest rate once again in August, this time to 4.60 percent.
Sixteen of the thirty analysts surveyed put the September peak rate at or above 4.60%. One economist believes the rate will remain at 4.10% while 12 others predict it will be 4.35%.
Rates are expected to remain steady at 4.60 percent through 2023, according to the mid-point forecasts.
When asked about their predictions for the level of core inflation in Australia towards the end of the year, 11 out of the 16 economists polled gave a response that suggested a minor decrease. One expert believes that inflation will stay the same, while four others see a considerable drop.
It is anticipated that inflation will average 5.7% this year and 3.2% the next year. Additionally, the expansion of the Australian economy is anticipated to average 1.5% this year and 1.4% in 2024.
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