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RBA expects inflation to fall in 2023

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While inflation continues to be worryingly high, it may have peaked.

The Australian Bureau of Statistics’ latest data show that inflation rose from 6.9% in October to 7.3% in November.

In early December, the Reserve Bank of Australia (RBA) forecast that inflation would “peak at around 8%” in December.

If that’s the case, inflation may already be cooling – even though the next inflation announcement (of the December result) may show an increase on the previous period.

Inflation is expected to decline in 2023 “due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand”, according to the RBA, before falling further in 2024, to “a little above 3%”.

The RBA has said that high inflation “damages our economy and makes life more difficult for people”, so it’s determined “to re-establish low inflation and return inflation to the 2-3% range over time”.