With the Australian economy’s current state, people are now paying more attention to how they spend their money, especially in the funeral industry, where prices vary so wildly that funeral services in Sydney rate higher than most places in the country.
The Reserve Bank of Australia recently gave its forecast on the economy, taking its predictions for growth down a peg or two, but compensated, saying that, if inflation continues to fall in the next few years, the economy will bounce back.
Released via the RBA’s quarterly statement on monetary policy, the RBA predicts growth of 2-3%, lower than the last forecast of 2.5-3.5% last May. The RBA says that this growth rate is likely to stick for the next couple of years, which they say is higher than what was estimated in the past.
However, the central bank has also noted that inflation is likely to return to 2.5-3.5% by June 2018.
The RBA says that a number of factors contributed to a more positive forecast, including a higher iron price, increased business investment, and an unemployment rate clocking in below 5.5%.
Back in its August meeting, the Reserve Bank froze the cash rate, having deemed the low of 1.5% to be good for Australia’s continued economic growth.
The RBA has stated that it believes that the pickup in inflation for the Australian dollar will be increased by the drop in the labour market, which is expected to lead to increasing wage growth from the current low levels. The recent decision by the Fair Work Commission to increase award and minimum wages could also possibly help wage growth in the September quarter.
Philip Lowe, the RBA’s governor, has asked workers to demand higher wages as Australia faces a bit of a wage growth crisis.
The RBA’s prediction, according to it, is based on the inflation of the Australian dollar and state that higher inflation would lead to lower numbers than what they predicted.
Currently, the Australian dollar sits at a value of 80 US Cents currently, which is a level the currency has not seen since 2014.
The RBA has stated that, in contrast to funeral services in Sydney, Eastern Australia real estate conditions, especially in Sydney, have eased up recently.