Statement on Monetary Policy May 2024
Central bank: rba | Document type: inflation_report | Date: 2024-05-01

Statement on Monetary Policy – May 2024
Inflation is still high and is falling more slowly than expected. Bringing
inflation down to the
2–3 per cent
target range is the Reserve Bank Board’s
highest priority. The Board’s decision to hold the cash rate supports inflation returning to
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What is going on in the economy?
Inflation remains high and is falling more gradually than previously thought.
Global growth is subdued and inflation is above target in many countries.
In Australia, economic growth also remains slow. Inflation has been higher
than expected and labour market conditions have proven stronger than
anticipated. Overall, higher interest rates have led people to cut back on
spending. This is slowing economic growth and bringing demand into better
balance with supply. Labour market conditions have eased but unemployment
remains low.
How do we see the economy developing?
Economic growth is expected to pick up gradually here and overseas.
Earlier interest rate rises and weak spending by consumers is likely to
weigh on economic growth this year. Growth is expected to pick up gradually
in 2025 as a recovery in real incomes supports an increase in household
The labour market is expected to ease further.
The outlook for the labour market remains uncertain. Unemployment is
expected to increase more gradually than previously anticipated and wages
growth is expected to soften over the next couple of years.
Inflation is expected to reach the 2–3 per cent target range in the second half of 2025.
Inflation is expected to be higher in the near term than previously thought
due to the stronger labour market and higher petrol prices. But inflation is
still expected to return to the target range in the second half of 2025 and
to reach the midpoint in 2026.
What did the Board decide?
At its May meeting, the Board decided to hold the cash rate.
The Board expects it will be some time before inflation is sustainably low
and stable. Keeping the cash rate at the current level is important to reduce inflationary pressures.
This decision supports the objectives of bringing inflation to target and
the labour market to levels consistent with full employment. The path to
return inflation to target will be bumpy. How interest rates evolve from
here is uncertain and the Board is watching developments in Australia and
overseas closely. The Board remains vigilant to the risk of continued high
inflation and is not ruling anything in or out.
More on the May 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