Analysts at NAB suggest that they have delayed the expected timing of their first expected hike by the RBA to H2 2020.
Key Quotes
“For some time we have noted our expectation of the first rise occurring in mid-2019 was highly data dependent. Growth has generally been as expected, though wages growth and the build-up in inflationary pressure has not.”
“The RBA also appears very patient and will wait for hard evidence of inflation returning to the target band on a sustainable basis. In addition, we have lowered our forecast for house prices; though still see the correction occurring in an orderly fashion. With further falls in house prices now factored in, we have incorporated a larger fall in dwelling investment and some additional spill-overs into weaker consumption.”
“Consequently our GDP and inflation forecasts have been lowered a little – we see GDP growth of 2.9% in 2018 before slowing to 2.4% in 2019 and 2.3% in 2020. It is important to note however, that we still see a robust rate of economic growth, with activity supported by strong growth in government spending, exports and growth in non-mining business investment.”
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