RBA’s increased economic forecast ‘certainly welcome’: Frydenberg

Treasurer Josh Frydenberg says the decision by Reserve Bank Governor Philip Lowe to elevate the economic forecast is “certainly welcome”.

“They upgraded their economic growth forecast from 4.25 per cent from next year to 5.5 per cent, and they have said very clearly that they expect unemployment to remain below five per cent for some time to come,” he told Sky News Australia.

“That is good news for the economy; it’s a sign that the government’s economic plan is working; it’s a sign that the labour market is very resilient.”

Mr Frydenberg said underlying inflation was now at 2.1 per cent, but it was “more moderate” than in other countries and is expected to be transitory.

“That’s the expectation, and of course, no one can guarantee what the particular inflation number will be in the months and years ahead,” he said.

“But right now, from where we sit and on the evidence we have and the facts that we have, it does appear that the inflation increase has been moderate.”