Economists in the Scope Survey say there is little chance of a wage-price spiral but most expect inflation will remain higher than wages until at least next year.
Top economists say the RBA and its fight to bring down inflation will be the key influence on the strength of the economy through 2023 and into next year.
US baseball great Yogi Berra is often quoted as saying “it’s tough to make predictions,especially about the future”. Scope panellists know this all too well.
Homeowners will be hit with higher mortgage repayments while workers’ pay rises will be eaten up by inflation until next year,economists believe,despite low unemployment.
Australia once had negative net debt. Now it’s on track for $900 billion and economists say it will never be paid off.
An increase in household debt through the COVID-19 recession will weigh heavily on any decision taken by Reserve Bank.
Scope economists are expecting an interest rate rise in 2023,but wages and inflation may not be on target by then.
Many of the nation’s top economists predict potential regulatory action and coronavirus lockdowns will take some of the heat out of the property market.
Some economists believe the RBA may have to start lifting rates as early as next year to deal with house prices,which rose 3 per cent in Sydney and 2.5 per cent in Melbourne last month.
Even before the pandemic recession,wage growth had been stagnant and barely keeping up with inflation.
It may not be up there with Bob Dylan going electric,but the way the Morrison government handled a $9 billion spending plan could signal a change in budget politics.