The Reserve Bank of Australia (RBA) is set to announce its monetary policy decision on Tuesday, 18 February 2025, with widespread expectations of a 25 basis point reduction, lowering the official cash rate from 4.35% to 4.10%. This anticipated move aims to stimulate economic growth as the nation faces ongoing financial challenges.
In conjunction with the rate decision, the RBA will release its quarterly Statement on Monetary Policy, providing updated economic forecasts and insights into the central bank’s outlook. Governor Michele Bullock is scheduled to hold a press conference at 3:30 pm AEDT to elaborate on the Board’s decisions and address questions from the media.
Economists from major financial institutions, including ANZ, Commonwealth Bank, NAB, and Westpac, unanimously predict the rate cut, citing easing inflationary pressures and a slight dip in economic growth as key factors influencing the RBA’s decision. Inflation has moderated to 2.4% in the last quarter, aligning within the RBA’s target range of 2-3%.
Following the RBA’s announcement, attention will shift to the upcoming release of the Wage Price Index (WPI) by the Australian Bureau of Statistics (ABS) on Wednesday, 19 February 2025, at 11:30 am AEDT. This index measures changes in wage rates over time, offering insights into labour cost pressures and potential inflationary trends.
Projections from the National Australia Bank (NAB) suggest an increase of 15,000 jobs and an unemployment rate holding steady at 4.1%. These labor market indicators will be closely analyzed to assess the health of the employment sector and its implications for future monetary policy decisions.
