RBA economic outlook versus Treasury's

Here's how the Reserve Bank of Australia's latest economic forecasts compare to the Treasury update released by Treasurer Jim Chalmers on July 28:

* gross domestic product (growth)

While the RBA's forecast for the 2021/22 financial year is unchanged it has cut its projections for the next two years. Its outlook is also less optimistic than Treasury's.

RBA (year ended June, per cent, compared to May forecasts)

2021/22 - 3.50 (3.50)

2022/23 - 2.25 (3.00)

2023/24 - 1.75 (2.00)

TREASURY (year ended June, per cent)

2021/22 - 3.75

2022/23 - 3.00

2023/24 - 2.00

* Unemployment rate

The rate for 2021/22 came in at 3.5 per cent - the lowest in almost 50 years. The RBA's outlook for the next two years is a bit better than Treasury's.

RBA (year ended June, per cent, compared to May)

2021/22 - 3.80 (actual rate reported was 3.50)

2022/23 - 3.50 (3.50)

2023/24 - 3.75 (3.50)

TREASURY (year ended June, per cent)

2021/22 - 3.80

2022/23 - 3.75

2023/24 - 4.00

* Wage Price Index (wages growth)

The RBA forecasts are broadly lower than Treasury's but there's a bit of uncertainty given pay packets are likely to be eroded by high inflation.

RBA (year ended June, per cent, compared to May)

2021/22 - 2.60 (2.70)

2022/23 - 3.40 (3.30)

2023/24 - 3.80 (3.70)

TREASURY (year ended June, per cent)

2021/22 - 2.75

2022/23 - 3.75

2023/24 - 4.00

* Consumer Price Index (annual inflation)

The RBA forecasts inflation to hit 7.75 per cent in the final quarter of 2022, which is in line with Treasury expectations. But it's less certain that inflation will fall as fast as Treasury thinks in the next two years.

RBA (year ended June, per cent, compared to May)

2021/22 - 6.10 (actual reported rate)

2022/23 - 6.25 (4.25)

2023/24 - 3.50 (3.00)

TREASURY (year ended June, per cent)

2021/22 - 6.10 (reported in July)

2022/23 - 5.50

2023/24 - 2.75

Sources: RBA quarterly Statement on Monetary Policy, August 2022, and Treasurer's Ministerial Statement on the Economy, July 28, 2022.

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