Fresh progress on Australia’s inflation challenge is widely expected as the International Monetary Fund grows more confident of a soft landing for the global economy.
The quarterly consumer price index from the Australian Bureau of Statistics is due for release on Wednesday and most economists think it will come in on the softer side.
Those at all four of the big banks are anticipating a material decline in inflation in December from the 5.4 per cent annual lift in the September quarter.
The December quarter result will set the stage for the first cash rate meeting of 2024 on February 6, with the Reserve Bank hoping for more proof of a weakening inflationary pulse.
Domestic inflation numbers will follow the an update on the global economic outlook form the IMF, with the international body revising up its forecasts for global growth in 2024 by 0.2 percentage points.
Australia similarly had its economic growth forecasts bumped up by 0.2 percentage points in 2024 and 0.1 percentage points in 2025 from the October report.
The IMF expects the nation’s economy to expand 1.4 per cent in 2024 and 2.1 per cent in 2025.
IMF chief economist Pierre-Olivier Gourinchas said the global economy was beginning the “final descent toward a soft landing” as inflation declined steadily and growth held up.
“The clouds are beginning to part,” he said.
Forecasts for growth had broadly been revised upwards since the October report, with inflation predictions largely marked down and falling faster than expected in most regions.
The improved outlook owed much to economic resilience in the United States, along with fiscal support in China.
“But the pace of expansion remains slow and turbulence may lie ahead,” Mr Gourinchas said.
Federal treasurer Jim Chalmers said a soft landing was “assumed but not assured”.
“The US is doing better than most would have thought but there are less positive signs out of China and Europe,” Dr Chalmers said.
He said Australia was not immune to the challenges but faced troubles from a “position of genuine strength”.
