However, we cannot assume that we have a choice of outcomes for the Australian economy, in terms of growth and inflation, which is invariant to what happens in the rest of the world. While we are benefiting from the stronger world growth compared with recent years, we will also be affected by the contractionary effects of the lift in world interest rates.
As the forecasts I mentioned in the beginning show, the year ahead will most likely be one of slightly reduced growth, and somewhat higher inflation, compared with the exceptional outcomes of recent years.