"The RBA lowered the official target cash rate by 25 basis points to a historic low of 2.75% at its meeting on 7 May"
- Viet Nguyen, a Research Fellow at the Melbourne Institue
Australian economy noticed higher consumer inflation expectations this month, adding more pressure on the nation's policy makers and the Reserve Bank of Australia to introduce more bold measures to control the inflation. According to the Melbourne Institute, consumer inflation expectation inclined to 2.3% in May, compared with a previous reading of 2.2%. Still the figure is within the RBA's 2% to 3% target band. In the meanwhile, the economy is facing many other challenges amid the recent global instability, especially amid the weakening performance of China, the main trade partner to Australia. Earlier this month a report by the same institute showed that confidence among Australian consumers dropped significantly in May, reaching its lowest level since August 2012, driven largely by negative responses to the Federal Budget.
"The RBA lowered the official target cash rate by 25 basis points to a historic low of 2.75% at its meeting on 7 May. The consumer inflationary expectations, reported here, were based on a survey in the following week. It remains rather modest and appears to echo the views of the RBA- moderate inflation and moderate growth," Dr. Viet Nguyen, a Research Fellow at the Melbourne Institue said after the report.
© Dukascopy Bank SA