RBA Kills Pollyanna Frydenberg’s Inflation Forecasts

Both leaders faced scrutiny today during the election campaign, but it was the Reserve Bank that grabbed the spotlight again by predicting inflation as far as the eye could see.

Former Prime Minister Malcolm Turnbull and Treasurer Josh Frydenberg (Image: AAP)

Government budget forecasts for inflation have been demolished by the Reserve Bank (RBA) in its latest Monetary Policy Statement, released as the fourth week of the campaign draws to a close.

The RBA’s quarterly release updates its economic forecasts and the May edition makes it clear that the Bank expects high inflation to be a feature of the Australian economy in the coming years.

While Treasurer Josh Frydenberg’s March budget forecast inflation for the current fiscal year at 4.25% and in 2022-23 at 3%, the RBA now expects the CPI to hit 5.5% in June and 4 .25% in 2022-23. Both are substantial upward revisions from his last Statement in February. Inflation is forecast to remain at 3%, the top of the RBA’s target rate band, in mid-2024.

Read more about the calamity in the electoral campaign…

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