Bill Evans from Westpac:
In the August Statement on Monetary Policy, GDP growth was forecast at 2-3% in 2017, 2 ¾-3 ¾% in 2018, and 3-4% in 2019. These forecasts are largely unchanged for the November revisions. Growth is still forecast at 2 ½ per cent in 2017, 3 ¼% in 2018, and 3 ¼% in 2019 (down slightly on the August forecast of 3-4%). The forecast unemployment rate from the August statement was 5-6% for 2017, 2018 and 2019. In this statement, the forecast is 5 ½% in 2017; 5 ½% in 2018, 5 ¼% in 2019. This slight reduction in the unemployment forecast for 2019 is more consistent with the above trend growth forecast for 2018 and 2019 than we saw in August.
The big change comes with the policy sensitive inflation outlook. Underlying inflation is now forecast at 1 ¾% for 2017; 1 ¾% for 2018, and 2% for 2019. These changes should not be entirely attributed to the revised weights in the CPI as released by the Australian Bureau of Statistics on November 6th.
