In some respects, the economy is now significantly different from how it was before the COVID-19 pandemic, Reserve Bank Chief Economist Paul Conway says in a speech delivered today.
Download the speech (PDF, 1.2 MB)
Successfully navigating the current environment demands a deep understanding of these global changes to support monetary policy decision making.
“This means that good research, backed by high-quality data, is more important than ever before,” Mr Conway says. Frequent and timely releases of high-quality data are the bedrock for sound policy decisions and meaningful research.
Economic data
“Recent economic data suggest that monetary policy is working, with the economy slowing and inflation easing. But we still have a way to go to get inflation back to the target midpoint of 2%,” Mr Conway says.
Consumer price inflation (CPI) in the year to December last year came in at 4.7%, down from 5.6% in the year to September 2023. However, stubbornly high domestic (non-tradable) inflation was 5.9%, driven in part by rent and construction costs. Tradable inflation was 3%, the lowest annual rate for almost 3 years.
Gross Domestic Product (GDP) growth in the September 2023 quarter was weaker than expected, with large downward revisions to history. Some of the revisions are due to methodological changes and do not necessarily mean that capacity pressures in the economy are much lower than previously assumed.
The Monetary Policy Committee will have more to say in the February 2024 Monetary Policy Statement, which will be based on an assessment of all incoming data.
More information
Read the November 2023 Monetary Policy Statement
We will publish our February Monetary Policy Statement at 2pm on 28 February 2024.
Watch the video of Paul’s speech
