Opinion

Productivity is the key to taming inflation for good

Either governments and business improve the supply side of the economy, or the RBA will have to keep squeezing demand indefinitely.

Paul BrennanEconomist

Jul 31, 2024 – 4.51pm

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With the much-anticipated June quarter CPI coming in very close to the RBA’s last published forecast, the board is likely to leave the official cash rate unchanged at 4.35 per cent next Tuesday.

That said, at 3.8 per cent for both headline and the Reserve Bank of Australia’s preferred underlying measure, annual inflation is only moderating gradually – and much more slowly than in peer economies.

Paul Brennan is chief economist with Suncorp and has worked at Citigroup Global Markets as well as the RBA, federal Treasury and the OECD.