Statement on Monetary Policy February 2024
Central bank: rba | Document type: inflation_report | Date: 2024-02-01

Statement on Monetary Policy – February 2024
Inflation is falling but is still high. It is important to bring inflation down
because high inflation hurts all Australians. The Board’s interest rate decision
supports the gradual return of inflation to the midpoint of our 2–3 per cent target
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What is going on in the economy?
Overall demand is still greater than supply, but the economy is moving towards a better balance.
Monetary policy is working to slow growth in demand. High inflation, higher
interest rates and tax payments have led people to cut back on spending.
Labour market conditions are easing but are still tight relative to full
employment.
The overall assessment is that demand has remained above the economy’s
capacity to supply goods and services, which continues to put upward pressure on
inflation.
How do we see the economy developing?
Economic growth is expected to slow here and overseas.
Growth is expected to remain low over the next year. As inflation comes down
and real incomes start to rise, consumption growth is expected to come back
to pre-pandemic levels over the next couple of years.
Labour market conditions are expected to ease further.
Labour market conditions are expected to continue to ease, to be broadly
consistent with sustained full employment and inflation at target, on the
assumption that productivity growth increases to around its long-run
Inflation is expected to decline to the 2–3 per cent target range in 2025 and to reach the midpoint in 2026.
Services inflation is still high and is expected to decline only gradually.
Goods price inflation has declined faster than expected, both here
and in a number of other economies. This is due to softer demand and the
easing of pandemic supply disruptions that have flowed through to prices.
What did the Board decide?
Based on their assessment of the current conditions in the economy and the
outlook, the Board decided to leave the cash rate unchanged.
Inflation is still high, but we are making progress towards a better balance
between supply and demand in the economy. While there are encouraging signs,
the economic outlook is uncertain and the Board expects it will be some time
before inflation is sustainably low and stable.
The Board’s decision today balances the objectives of bringing inflation
down while also preserving the gains in employment. The Board’s future
decisions will depend upon the data and evolving risks, and a further
increase in interest rates cannot be ruled out.
More on the February 2024 monetary policy decision...
Reserve Bank Board Statement
The Board decided to leave the cash rate target unchanged at 4.35 per cent.
Monetary Policy Board Statement
Media Conference
Governor Michele Bullock addresses the media after the monetary policy decision.
Media Conference
Monetary Policy Minutes
Minutes of the Reserve Bank Board meeting, published two weeks after the decision.
Monetary Policy Minutes