As many of you would understand from first-hand experience, forecasting is always difficult, but especially so over the past couple of years. Nevertheless, as I noted in a speech last month, forecasting is an important part of our monetary policy process since the RBA Board needs to form a view on how its policy decisions might impact the economy and inflation in the future.
Turning to the second issue, I would like to draw your attention to the blurring of the line between monetary and fiscal policies. As I have just explained, unconventional monetary  4  See Hannoun, H., “Monetary Policy in the Crisis: Testing the Limits of Monetary Policy,” Speech at the 47th SEACEN Governors’ Conference, 13–14 February 2012.