Australia's Reserve Has Made A Big Cut To Its Inflation Forecast

The RBA’s May Statement on Monetary policy is out.

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The key number is a cut in the CPI forecast from 3% to 2.25% in the year to June 2013.

The CPI forecast for the year to December 2013 is now just 2%.

Meanwhile the GDP growth forecast remains at 2.5% for the year to June 2013.

The RBA uses an assumption of the Australian dollar trading at US$1.02 for its forecasts but last night the Aussie took a big dive towards parity. It’s up slightly in early trade but still at just US$1.009.

The statement can be accessed here (PDF) and there’s a summary at the SMH.

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