on Friday and ahead of economic growth data that will help define the path for interest rates as central banks combat inflation.
Consensus forecasts peg quarterly growth at 0.6 per cent, or 2.9 per cent on a year-over-year basis, in a period overshadowed by the effects of the omicron strain and heavy flooding on the east coast. Wages are among the stickiest costs facing businesses and when they rise consistently it can transform higher inflation from a temporary burst to a prolonged issue facing the economy.
CBA anticipates the data will “not alter the path of monetary policy”, and that the RBA will raise the cash rate by 25 basis points at its June meeting, following an increase by the same margin in May. The comments provide some confidence that the government “will manage the budget responsibly,” said Shane Oliver, chief economist for AMP Capital.“Higher commodity prices and lower unemployment still point to better budget numbers ... but the deficit and debt projections are still too high and rely over the medium term on optimistic productivity growth assumptions.”P/ASX 200 has fallen 3.5 per cent this year, dragging the blue chip index down 5.8 per cent from its peak in August last year.
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