SYDNEY (Reuters) -Australia’s economic outlook is balanced at the moment with risks on both the upside and downside, while there are signs consumer spending is picking up, a top central bank official said on Tuesday.
Answering questions at a financial industry conference, Reserve Bank of Australia Assistant Governor Sarah Hunter said core inflation was coming in broadly in line with forecasts, though there seemed to be less disinflation in prices.
Hunter, who heads the central bank’s economics unit, said underlying inflation was getting closer to the mid-point of the RBA’s 2% to 3% target band, and aim was to keep the economy near to full employment as possible.
Core inflation ran at 2.7% in the June quarter, well down from the peak of 6.8% seen in late 2022.
The economy also grew at its fastest annual pace in almost two years in the June quarter as consumer spending finally picked up, while monthly inflation unexpectedly spiked higher in July.
Investors saw the data as arguing against the RBA cutting interest rates this month, though futures still imply an 80% chance of an easing in November.
The central bank has cut rates three times this year to take them to 3.60%, and markets have largely priced in 50 basis points more easing to 3.10%.
(Reporting by Wayne Cole and Stella Qiu; Editing by Christian Schmollinger and Himani Sarkar)
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