Australias economy is in a very good position. Lowest unemployment of decades, careful management of interest rates is gradually reducing inflation back to acceptable levels. Wage growth which was resisted under the Morrison do nothing government has started to moderately increase without getting out of control thus giving many Australians the ability to start to recover from the inflationary pressures which are a global issue. The government has resisted pump priming which would exacerbate inflation while rearranging the tax cuts legislated for the next parliament so endeavouring to lock in more tax cuts for high income earners who have the capacity to pay tax. Supply side inflation is gradually easing. So Australia is in a good position to reduce interest rates by the end of this year which is what the market has factored in.
While many households are struggling so the government should look to provide non inflationary support where possible the RBA has done an excellent job of containing inflation without causing a major recession which results in high unemployment and many business failures. Given the lagging effects of interest rates and difficulty in fine tuning the economy on typically lagging data they have walked the tight rope to tame inflation.
Australia has dodged the inflation bullet which has affected every major economy across the globe.
Australia headed towards economic 'soft landing', says Macquarie CEO
CEO Shemara Wikramanayake said on Monday.
The country's unemployment rate was just below its pre-COVID level and inflation had slowed, Wikramanayake noted at the Australian Financial Review Business Summit.
"Central bankers seem to be getting to a point where they can now reduce rates later this year and deliver that soft landing that really none of us were forecasting," she said.
SYDNEY, March 11 (Reuters) - Australia's economy is set up for interest rate cuts in 2024 and a "soft landing" after a lengthy period of inflation, Macquarie Group (MQG.AX)
https://www.reuters.com/markets/australia-headed-towards-economic-soft-landing-says-macquarie-ceo-2024-03-11/
