Says has balanced low inflation against risks of rising household debt and recent rise in AUD has had modest dampening effect on economic forecasts. Further rise in AUD would lower economic growth, inflation. RBA expects underlying inflation to reach around 2 pct in 2H 2017, rise a little thereafter. Utility prices to rise more than first thought over next few years, make large addition to CPI. Economy growing around 3 percent for next two years and sees unemployment little under 5.5 pct by end 2019, recent jobs data provides more confidence
Trims GDP forecast for December 2017 to 2-3 pct, December 2018 unchanged at 2.75-3.75 pct, 2019 raised to 3-4 pct and Underlying inflation forecasts unchanged at 1.5-2.5 pct end 2017 and 2018, 2-3 pct by end 2019
Forecasts based on technical assumption of AUD staying at $0.8000 and GDP growth looks to have picked up in Q2, weakness in Q1 was temporary. Recent increase in employment supporting household incomes, consumption and wage growth expected to remain subdued, increase only gradually
Source: Bloomberg Pro Terminal
Trader - S. Fuchedzhiev
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