Conclusion The central scenario for the Australian economy is a positive one, with growth over the next couple of years at, or above, average, a relatively strong labour market, and inflation consistent with the medium-term target. There are, however, risks around this central scenario that we will need to watch carefully.
Recent experience has reminded us of the importance of flexibility of both the economy and macroeconomic policy in managing these risks. As we look forward, if something like the central scenario were to eventuate, we will need to keep a strong focus on improving the supply side of the economy so that demand can grow solidly without putting upward pressure on inflation.