' s updated central forecasts, which were released last week in our quarterly statement on monetary policy. those central forecasts have the australian economy staying on that narrow path that i spoke about. they have : inflation returning to target over the next couple of years ; the economy continuing to grow, albeit at a fairly slow rate ; and unemployment rising, but remaining below the prepandemic low. 2 / 5 bis - central bankers'speeches our assessment is that inflation is likely to have peaked around the end of 2022 and will now start declining. the central forecast is for cpi inflation to decline to 4¾ per cent over 2023 and to around 3 per cent by mid - 2025. we have not yet seen evidence of a moderation of goods price inflation in australia, but we have seen it elsewhere around the world and we expect the same to take place here. supply chain problems are being resolved, shipping costs are normalising and oil prices are off their peaks. these lower prices, or lower rates of inflation in global markets, should flow through into prices in australia. while this will help inflation return to target, it is unlikely to be enough without also observing some ongoing moderation in demand. in terms of economic growth, our central forecast is for gdp growth to slow to around 1½ per cent this year and next. the bounce - back in spending following the pandemic has largely run its course. more broadly, the combination of higher interest rates, costof - living pressures and the decline in housing prices is expected to weigh on household spending. a contraction in residential construction is also expected following the pandemic - related boom. in contrast, the outlook for business investment remains reasonably positive, with many firms operating at a high level of capacity utilisation. the labour market remains tight, with the unemployment rate near a 50 - year low. the share of working - age australians with a job has never been higher than it has been recently, youth unemployment has declined and underemployment is the lowest it has been for decades. these are good outcomes for our country. job vacancies remain at a very high level, although some firms report that it has been less difficult to find workers recently than it was a few months back. the central forecast is that the unemployment rate gradually increases from here due to slower growth to reach 4½ per cent by mid - 2025. this rate of unemployment is below that prevailing in the years prior to the pandemic. if

bis central bankers ’ speeches policy struggles for promoting productivity given that productivity expansion is crucial for economic growth, its promotion constitutes a natural target for policy making. countries vary in terms of geography, cultural heritage, and other conditions that may affect economic efficiency differently. at the same time, in any nation, room for enhancing productivity growth can almost always be claimed. the pursuit of this objective faces significant challenges. while some are common to other policy decisions, the difficulties encountered here may be greater due to the following four reasons, at the least. first, there is no silver bullet for resolving the problem of productivity. the economic literature referred to and the discussions held in this conference make it clear that a number of elements may interact. second, there is no well - defined list of factors that could ensure high productivity growth in all cases. for example, economists know that reliable institutions, fully operating markets, and competition may provide incentives for investment, human capital accumulation, and productivity growth. however, many other policy decisions may also contribute to the same end, and their combination may vary. there is no recipe, let us say, based on some composite indicator, with which policy makers should try to maximize results. the best policy mix and the need for concrete institutions may depend on history and the initial conditions of specific countries. third, even if we had a clear - cut list of elements for productivity expansion, the relative importance of their components would hardly be undisputed. the consequence of this is that there is no roadmap that is obviously superior to alternative paths for economic reform. fourth, though a trajectory did exist that would dictate a preferable sequence of measures, democratic societies require some of these changes to be legislated. international experience demonstrates that political feasibility does not necessarily coincide with economic desirability. these four difficulties illustrate the fact that our understanding of productivity and our capacity to prescribe changes are necessarily limited, pointing towards the need for caution. perhaps in no other area, given its breadth, should economic advisers and policy makers exert a greater deal of judgment while, at the same time remaining humble. in any case, policy makers are expected to use all the information on hand, including the best estimates of theoretical models, to foment a favorable setting for productivity. sometimes, this may simply mean incrementally removing obstacles, thereby allowing private participants to strengthen the existing institutions that facilitate economic activity. 6 additionally, implementation of measures to fuel efficiency must not be considered in isolation. the