RBA's Bullock says a major economic issue is 'a little bit lost' in inflation fight
Reserve Bank governor Michele Bullock is the star player of Australia’s fight against inflation. But the ball might not be in her court.
The last two Reserve Bank board meetings have included particularly pointed references to productivity.
On Tuesday, the central bank's post-rates decision statement specifically noted that productivity growth needs to “pick up in a sustained way” for inflation to continue declining. The RBA often comments on productivity and its implications for wages and the economy, but this issue might soon take centre stage.
If markets and the majority of economists are correct, interest rates will come down in a matter of months, letting the nation spend more time on other economic concerns. But if forecasts prove incorrect – as they often do – the public is likely to start asking deeper questions about the state of the economy.
Households across Australia have been focused on price rises and interest rates for more than two years, with conversations undoubtedly more dominated by the cost of living than any other economic issue.
