Australia says inflation could ease to RBA target range by year end

SYDNEY -Australia's government, preparing to announce the federal budget, said on Sunday inflation could moderate to the central bank's 2%-3% target range by the end of the year, a faster easing than predicted in December.In the December economic and fiscal outlook, the government projected consumer price inflation would slow to 3.75% by mid-2024 and 2.75% by mid-2025, putting it back in the Reserve Bank of Australia's target band.

RBA economists, by contrast, forecast inflation, at 3.6% in the first quarter, to pick up to 3.8% by June and stay there until the end of the year. "Inflation is moderating in welcome ways but it’s not mission accomplished because people are still under pressure," Chalmers said in the statement. "The Budget will put downward pressure on inflation, not upward pressure on inflation."

The economy has slowed due to the impact of global economic uncertainty, moderating but high inflation and higher interest rates, the government said.

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