Australia's inflation forecast above RBA target until 2027

Summarised from 2 outlets · Updated 13 Oct, 04:32 · Archive

Australia's inflation is projected to remain above the Reserve Bank's target range until the end of 2027, with only six other developed nations having higher rates.

Australia's inflation is projected to remain above the Reserve Bank's two to three per cent target band until the end of 2027, with only six developed economies forecast to have higher rates. The International Monetary Fund predicted inflation will slow from four per cent to 3.9 per cent this year and 3.1 per cent in 2027, above the RBA's target range. By 2026, only Greece, Bulgaria, Lithuania, Croatia, Iceland and Andorra are forecast to have higher inflation than Australia among developed nations.

The RBA raised the cash rate to a 15-year high of 4.6 per cent in September, with minutes from that meeting showing the central bank was concerned inflation was not easing fast enough. Multiple global supply shocks—the Middle East conflict, the artificial intelligence boom and a strong El Niño—are pushing up prices for oil, technology products and agricultural commodities.

The board stated it would accept higher unemployment and lower economic growth than otherwise necessary to get inflation under control. The RBA's August forecast had predicted inflation would ease to 2.6 per cent by the end of 2027. The board said it would 'continue to do what it considered necessary to achieve that outcome, including increasing the cash rate target further if required'.

How it is being reported

• More rate hikes loom as inflation tops rich nation listAustralia's inflation rate is forecast to remain above the Reserve Bank's target range amid rising oil, tech and agricultural prices.Perth Now · 13 Oct, 04:16
• More rate hikes loom as inflation tops rich nation listAustralia's inflation rate is forecast to remain above the Reserve Bank's target range amid rising oil, tech and agricultural prices.The West Australian · 13 Oct, 04:16

In this story: Reserve Bank of Australia · International Monetary Fund · Australia

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