The Statement on Monetary Policy (SoMP) is released each quarter and it is closely watched for the updates to the RBA’s own forecasts. In the November SoMP, the opening statement of the “Outlook” section stated “Domestic economic conditions have been a bit stronger than were expected in August”. In February’s SoMP, this was changed to “Domestic economic conditions have been a bit softer than were expected at the time of the November Statement.” In this latest SoMP, the Outlook section starts with the statement, “Economic growth in Australia was weaker over 2018 than expected at the time of the February Statement.” It is basically a repeat of the opening line from February. As a result, the RBA has reduced GDP and inflation forecasts and increased one unemployment forecast.
GDP growth in the early periods of the RBA’s forecasts though to June 2021 (see table) have been reduced by anywhere from 0.25% (year to December 2019) to 0.75% (year to June 2019). Note the latest forecast for the year to June 2019 has been downgraded by 0.75% in the last two SoMPs.