The Reserve Bank left official interest rates at a record low of 0.1 per cent on Tuesday, and while it says it won’t lift them for "some time" many economists think that time may come sooner than expected.
An SBS News poll of 19 prominent economists has found while five expect official interest rates to climb from next year, most (13) are forecasting the first rise to come in 2023, most likely in the first half of that year.
Besa Deda, chief economist at St George Bank, has pencilled in a February 2023 official interest rate rise because of what is expected to be a strong labour market recovery.
“We’re possibly looking at an unemployment rate by the end of next year with a 3 in front of it, which we haven’t seen on a sustained basis since the 1970s," Ms Deda said.
“We’re also looking for underlying inflation to creep higher, our forecast is stronger than that of the RBA, and we think that by early 2023 conditions will be conducive to the RBA to begin raising rates.”
An SBS News poll of 19 prominent economists has found most are forecasting the first rise to come in 2023. Source: SBS
Consumer prices are rising as the world economy reopens amid a global supply chain crisis.
Experts are trying to figure out whether these price rises are temporary or more sustained.
For most of this year, the RBA said conditions for a rate rise would include a sustained lift in inflation which would boost wages, and that wasn’t expected until at least 2024.
In its supporting statement after its board meeting on Tuesday, the RBA removed any date reference to a potential lift in interest rates, instead saying conditions for a rise would likely “take some time and the board is prepared to be patient.”
