The federal Treasury is predicting inflation will fall to between two and three per cent by December 2024 despite spending.
A significant departure from the RBA's forecast, which predicts inflation to still be at 3.8 per cent in December before falling to 3.2 per cent in next year in June.
Judo Bank Chief Economic Advisor Warren Hogan joined Sky News Business Editor Ross Greenwood to discuss the government’s inflation predictions ahead of the Federal Budget on Tuesday.
“So even if we do get such a significant drop in inflation over the next three or four quarters as the government forecast suggests, there certainly won’t be a mechanical response from the RBA to either not lift rates if the economy is doing better than expected or indeed cut rates if the economy looks a bit softer,” Mr Hogan said.
“Their assessment is inflation is actually higher than what the CPI says.”
Негізгі бет Government forecast suggest inflation will drop faster than expected by RBA
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