RBA liaison says inflation job done

From the recent SoMP.

Recent liaison discussions suggest that demand conditions have been little changed since the end of 2023, and economic activity is not expected to grow much in the period ahead. Given the current high-cost environment, some firms have scaled back their investment plans, though the outlook for investment in infrastructure remains strong.

Firms are reporting that it is becoming more difficult to pass cost increases through to prices and have increased their focus on cost discipline and/or improving productivity. Growth in wages and prices is expected to moderate further over the year ahead.

Consumer spending remains cautious and price sensitive.

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About the author

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.