The “What Do Firms Tell Us About the Inflation Outlook?” article is interesting:
- The Reserve Bank’s liaison program collects information from firms in Australia about current economic conditions and their expectations for future conditions, including their own prices. Firms’ observations provide a timely read on inflation.
- Over the past six months, firms have generally expected their prices growth to continue to moderate, but on average to remain above the Bank’s inflation target range of 2–3 per cent.
- Firms have reported that large cost increases over recent years are still flowing through to some parts of the supply chain and have indicated that this is the primary driver of their decisions to increase prices at a faster-than-normal rate.
- Slower growth in demand and increased competition are expected to result in a further slowing in growth of firms’ prices over coming quarters.
It appears from this summary that inflation will remain high and sticky for some time to come.
more to come
This article was written by Eamonn Sheridan at www.forexlive.com. Source