The RBA made virtually no changes to its growth and inflation forecasts in its quarterly Monetary Policy Statement released last week. Real GDP growth is forecast in 2.5% to 3.5% y-o-y range through to the end of 2017 before lifting slightly to 3.0% to 4.0% range in 2018 while headline CPI and underlying inflation is mired in 1.5% to 2.5% y-o-y range throughout 2017 and 2018. This forecast growth and inflation combination is not good enough as far as the RBA is concerned. Inflation forecast to run below the RBA’s 2.0% to 3.0% y-o-y through to the end of 2018 implies lost opportunity in terms of growth that could have run faster and unemployment that could have run lower without risking unacceptably high inflation. The RBA’s forecasts also imply that they have more monetary policy easing to go given that there are no other Australian growth priming factors sitting somewhere in the wings. Continue to the attached PDF