Analysts at NAB suggest that their forecast outlook for Australian economy is essentially unchanged, and they are pencilling in two 25bp rate hikes from mid-2018, with employment now expected to be strong enough to give the RBA enough confidence in its forecasts for an eventual lift in wages growth and inflation by that point.
“We remain more cautious about the economic outlook than the central bank, mindful of the potential hurdles to growth such as impending peaks in dwelling construction and LNG exports, and a struggling household sector amidst low wages growth, higher energy prices and elevated underemployment and household debt.”
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