Inflation has remained consistent with the 2–3 per cent target. For the year to December, it looks as though the Consumer Price Index will have risen by about 2½ per cent, with underlying inflation perhaps a little below that. Our assessment is that inflation will remain consistent with the target over the next one to two years.
Looking ahead, resource sector investment will decline – gradually at first but more quickly thereafter. It will most likely fall considerably over the next few years. There is therefore scope for other forms of private demand to grow more quickly, the more so as government spending is scheduled to be subdued.