As we came into the new year, we and other forecasters continued to upgrade our views of the outlook for the global economy. In Australia, our forecasts for growth are essentially unchanged from the ones we published in November. We still expect growth to pick up to around 3¼ per cent over 2018 and 2019.
While our forecasts for wage growth and inflation are also unchanged, there are some positive signs that make us a bit more confident that the expected pick-up in wage growth and inflation will eventuate. Business conditions are looking more positive, employment growth has been rapid, and short-term indicators of future hiring have picked up further.