Inflation is too sleepy to drive interest rate rises in 2018, according to the latest quarterly Business Outlook from Deloitte Access Economics.
“The world is stubbornly slow to reflate and that is leaving central banks traveling pretty slowly in their quest to lift rates from what, in many places, are still record lows,” says partner Chris Richardson.
“The story’s the same in Australia. That’s good news for property owners, as it says that the Reserve (Bank) won’t be raining on their parade, or their housing prices, anytime soon.”
Richardson says a global backdrop of good growth and weak inflation is music to Australian prospects, ensuring a firm floor under export earnings.
“That mix of good global growth with a record low cost of capital saw Australia’s growth pick up pace over the course of 2017, and we should maintain momentum through 2018,” he says. “That’s a pretty good outlook.”
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