UBS: RBA “way too bullish”

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.

Too right.

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