Reserve Bank of Australia Assistant Governor (Economic) Sarah Hunter speaking at the Citi Australia & New Zealand Investment Conference 2025:
Recent data has been a little stronger than expected
Inflation likely to be stronger than forecast in Q3
Labour market and economic conditions might be tighter than assumed
Employment growth has slowed by more than expected
Uncertainty about the global outlook remains elevated
Board will adjust policy as appropriate as new information comes to hand
Slower productivity lowers economy’s speed limit and pace at which wages can grow
Slower productivity linked to lack of competition, business dynamism, and capital deepening
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RBA Assistant Governor Sarah Hunter said stronger-than-expected data and a likely hotter Q3 inflation print point to a still-tight economy, though job growth has cooled. Speaking at a Citi event, she highlighted slowing productivity as a structural drag that lowers Australia’s growth and wage “speed limits,” while reaffirming that policy will adjust as data evolve.
Hunter’s comments dampen expectations of near-term rate cuts, reinforcing the RBA’s cautious stance as inflation risks remain sticky. The focus on weak productivity signals limited policy room for aggressive easing even as growth moderates.