The Reserve Bank of Australia has upgraded its economic outlook for the nation, putting its near-term GDP and CPI predictions up 25 basis points each.
The central bank now expects June 2014 GDP growth to come in at 2.75% and December 2013 CPI inflation to come in at 2.7%.
The upgrade comes after a marked depreciation in the Australian dollar, which fell about 14% against the US dollar throughout the 2013 calendar year, and about 5% since the RBA released its previous economic forecasts in November.
“The Australian dollar has depreciated by around 5 per cent since the November Statement in response to economic developments both at home and abroad,” the RBA reported today.
“This unwound the appreciation over the preceding few months, leaving the currency around 12 per cent lower than it was at the time of the May Statement. If sustained, lower levels of the exchange rate will assist in achieving balanced growth in the economy.”
From the RBA’s Statement on Monetary Policy today:
And here are its previous forecasts, from its Statement on Monetary Policy in November: