By James GlynnSYDNEY--Inflation pressures across Australia's economy are now expected to ease more gradually than thought just three months ago, said Marion Kohler, acting chief economist at the Reserve Bank of Australia. "Domestically sourced inflation, in particular, services price inflation, has been widespread and slow to decline," she said in a speech to a conference of financial market participants. Still, the RBA's forecasts assume that productivity growth will soon recover to around its pre-pandemic trend, but so far there are few signs of that. Nevertheless, the RBA forecasts that inflation will be a little below 3.0% at the end of 2025, consistent with its target, Kohler added. A recent increase in fuel prices is also a timely reminder that upside surprises from supply shocks could affect headline inflation.

Source: Wall Street Journal November 12, 2023 23:48 UTC