RBA confident inflation will start to ease

AUSTRALIANS battling soaring costs could soon see relief, with the Reserve Bank of Australia forecasting inflation will begin to ease in 2023.

Speaking at the senate select committee on the cost of living on Wednesday, RBA spokeswoman Marion Kohler, said “we think the peak in inflation was at the end of 2022 – at around 8 per cent – and that inflation will begin to ease over the course of this year”.

The Reserve Bank Board will meet on February 7 to discuss its monetary policy decision, with its public statement being released on February 10.

Ms Kohler said the higher rates were necessary to tame inflation.

“We are aware this is making it difficult for a number households but the judgment is (that having) the higher inflation for longer is inflicting even more pain,” she said. “We understand that some people are finding the rise in interest rates difficult to manage and others will have to cut back on discretionary spending.

“However, higher interest rates are necessary to ensure that the current period of higher inflation and cost of living pressures does not persist too long.

“As the Governor has emphasised, the Reserve Bank Board is focused on returning inflation to target and establishing a more sustainable balance of demand and supply in the Australian economy.”

Ms Kohler said she wasn’t able to pre-empt what the RBA board would do or say next week but stood by the RBA’S November statement that the country would not be heading for recession, unlike other countries facing that prospect.