UBS is all over the RBA with several hard hitting notes overnight:
UBS…doesn’t think their forecasts for GDP and inflation are plausible – they seem way too bullish.
…For Australia, despite Q4 surprisingly weak GDP, & further weakness in Q1/Q2 partials, they still expect “around 2¾% in 2019 and 2020” – very optimistically unrevised from Feb’s SOMP – & far above UBS at 1.9% in 2019, consensus at 2.2% & IMF at 2.1%.
…We now question if the RBA still credibly target inflation as they have for decades. We also think their unchanged GDP forecasts are very optimistic, given even their own April minutes said “growth had slowed markedly” in 2H-18.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
