The Reserve Bank of Australia (RBA) Assistant Governor Debelle is on the wires now, via Reuters, making a scheduled speech titled “Low Inflation” at the Economic Society of Australia Business Luncheon, in Brisbane.
Key Headlines:
Says expects inflation around 2.25% next couple of years.
Expects most downward forces on inflation to eventually abate.
“We would like to be more confident” inflation will be sustained at the target.
Says the current accommodative stance of monetary policy will assist this outcome.
Uncertainty on Govt energy policy contributed to significant underinvestment in new supply.
Electricity prices now falling, could depress inflation over several quarters.
How electricity pricing plays out a “significant uncertainty” for inflation.
Says increased retail competition has put downward pressure on inflation.
Says expects these competition forces still have “some way to run”.
Govt steps to lower childcare costs will depress CPI in Q3, maybe longer.
Expects rent inflation to pick up, but take some time to impact on CPI.
“Considerable uncertainty” about spare capacity in labour market.
Says drought to have mixed impact on food prices.
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